Workers and employers fail to agree on minimum wage

Andi Hajramurni, The Jakarta Post, Makassar, South Sulawesi

Councillors, labor leaders and businesspeople failed to reach an agreement here on Thursday over whether to raise minimum wages of workers in South Sulawesi province next year.

Those present at the meeting with the South Sulawesi legislative council's Commission E for the economy became embroiled in a heated debate as they stood by their respective stances on the issue.

Leaders of labor unions demanded that the provincial minimum wages (UMP) be increased 100 percent in 2004 from the current Rp 415,000 (US$92) per month.

But local businesspeople grouped in the Indonesian Employers Association (Apindo) rejected the demand and asked the government not to raise the wages, arguing that the rise would pose a new burden on them amid the continuing economic crisis.

Secretary of Apindo South Sulawesi Rahim Zulkifli said the proposed increase could even force companies to lay off workers, as they would not be able to afford the new wages.

"We ask that the provincial minimum wages not be increased, because it is impossible during the current economic situation. If the 2004 wages are raised, we will surely have to revamp or lay off workers en masse," he said.

Meanwhile, Rachmawati Karim, coordinator of the May First Labor Movement (Satu Mei Geram), said next year's minimum wages should be raised by 100 percent, because the current pay was "inhumane".

In determining the wages, the relevant authorities should at least refer to the monthly regional living requirement (KHM), which had recently been set at Rp 447,160 per month by the Regional Representatives Council (DPD), she argued.

"The demand for a 100 percent increase in wages is based on the KHM and the rise in the prices of all basic commodities," she said.

However, Rachmawati criticized the regional living costs as "irrational", saying it did not reflect the real minimum cost of living for workers.

For example, the price of rice -- an item included in the regional living costs -- was set at Rp 2,225 per kilogram, while the price on the market was Rp 2,225 per liter, she said.

Also, the price of trousers was set at Rp 7,000 per pair. "What kind of trousers sells for Rp 7,000 right now? It's irrational," she added.

Zulkifli further said the demanded wage increase should take into account several factors, including the fact that many companies could still not afford to pay their workers at the current minimum wage.

However, he said if the labor unions insisted on the wage increase, it should not exceed the national inflation rate of 6 percent.

As the debate continued to heat up, Commission E councillor Anas Genda eventually closed the meeting without it having reached any agreement, suggesting further talks later.

Outside the council, around 100 workers from a number of Makassar companies staged a rally to support the demand for a 100 percent rise in minimum wage next year.