Wages raised across the country, overtaken by rising living cost
Zakki Hakim, The Jakarta Post, Jakarta
Minimum wages have been increased nationwide by between 5.3 percent and 28.79 percent as of Jan. 1, but labor activists declared the increases inadequate to cope with the recent rises in the cost of living.
A Ministry of Manpower and Transmigration report shows that minimum wages in Nanggroe Aceh Darussalam have been increased by 28.79 percent to Rp 425,000 (about US$48). The lowest provincial increase, in West Kalimantan, saw wages increase 5.3 percent, from Rp 380,000 to Rp 400,000.
However, the report notes that most of the new minimum wages are still lower than the minimum living costs in the respective provinces.
In East Kalimantan, for example, the new minimum wage is set at Rp 540,000 per month, or about 62 percent of the minimum living costs estimated at Rp 860,683.
Only in four provinces -- North Sumatra, South Sumatra, Yogyakarta and South Kalimantan -- are the new minimum wages about the same level as the minimum living costs.
Labor activist Dita Indah Sari from the National Front for the Struggle of Indonesia Workers (FNPBI) said she appreciated the wage increases but expressed concern the increases were well below rising living costs.
"The governors made the decisions on the wage increases before the end of the year but since then prices of basic needs have skyrocketed following the fuel, electricity and telephone charge increases."
She told The Jakarta Post on Tuesday that even though Jakarta's minimum wage was upped 6.8 percent to Rp 631,554 per month, it was still 16 percent lower than the minimum living costs of Rp 746,749, calculated by the provincial administration on the basis of prices in October.
She said a FNPBI survey showed minimum living costs in Jakarta were about Rp 1.13 million per month per person in October 2002.
Due to the recent price hikes, living costs in the capital were now estimated at Rp 1.4 million per person per month, she said.
Dita said because the new minimum wages were not adequate to finance living costs, workers should join forces with employers to urge the government to revise its price increases.
Indonesian Employers Association (Apindo) deputy chairman Djimanto said the government should revise its policy on price increases.
"Instead of raising prices of fuel, electricity and telephone calls simultaneously, it should have increased utility prices in stages," he said.
He said increases in minimum wages would not have much effect on production costs had the impact not been compounded by the recent hikes in utility prices. Furthermore, the wage increases were still in line with inflation in the country.
Apindo, therefore, did not oppose the minimum wage increases, he said.
"But we will work hand in hand with workers to urge the government to, at least, introduce new policies that can compensate for the negative impacts of the utility price hikes," he said.
Both Djimanto and Dita said the proposed policies should include the eradication of illegal levies and corrupt practices that had thus far had unnecessarily increased production costs.
Djimanto said the proposed policies should also include the introduction of tax incentives for loyal taxpayers, the increase of the levels of untaxable incomes, the avoidance of double taxation on added value, the facilitation of export credits and the lowering of interest rates on Bank Indonesia Certificates.
Apindo members would let their workers stage rallies demanding the government take steps to implement its recommendations, he said.
"We hope the government would take such measures by Jan. 15," he said. "Otherwise, we will have to either close or rationalize our operations -- measures that will cause massive dismissals of workers."