Wages raised across the country, overtaken by rising living cost
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."