Wages and efficiency

Wages and efficiency

On April 1 regional minimum wages for all Indonesian workers
will be increased by an average of 10.07 percent. The increase
was given a rather cool welcome by the All-Indonesia Workers
Union (SPSI), which had hoped for an increase of at least 15
percent. SPSI chapters in the provinces also appear to be
disappointed after hoping for a 20 percent increase. The SPSI's
federation chairman, Bomer Pasaribu, said the increase was small
considering last year's inflation rate of 6.5 percent.

Little has been heard from our nation's businesspeople. They
probably realize that the decision was not only based on economic
considerations, but also political ones. To balance the increase,
businesses will hopefully attempt to improve efficiency and
persuade their workers to step up productivity.

Another helpful measure would be for the government to
eliminate hidden extra costs, which arise from an inefficient
government bureaucracy. These costs are much more burdensome to
businesses than any wage increases.

An attempt to eliminate these extra costs would help our
entrepreneurs improve operating efficiency and boost our national
exports.

-- Bisnis Indonesia, Jakarta