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Jakarta Post

As minimum wage remains low, workers trapped in poverty

Blue-collar workers in Jakarta typically have to work a second job to meet their daily basic needs, as many are trapped by debt and poverty, partly because over the past six years, the provincial minimum wage (UMP) has not been enough to cover basic living standards, a labor union says

Novia D. Rulistia (The Jakarta Post)
Jakarta
Mon, November 21, 2011

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As minimum wage remains low, workers trapped in poverty

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lue-collar workers in Jakarta typically have to work a second job to meet their daily basic needs, as many are trapped by debt and poverty, partly because over the past six years, the provincial minimum wage (UMP) has not been enough to cover basic living standards, a labor union says.

Meet Agus (not his real name), a cleaner at a West Jakarta mall. Agus’ salary is slightly higher than the UMP of Rp 1,290,000 (US$143), but he is still mired in poverty.

To survive on his Rp 1.3 million a month salary, Agus and his wife have had to adopt a diet of instant noodles.

“For example, on Monday and Tuesday, the menu will be rice with tempe or tofu. Then we will eat instant noodles for a couple of days, before we can eat tempe, tofu and vegetables again,” he said.

The biggest allocation of his income is for paying their Rp 600,000 a month rent for their house in Cipulir, South Jakarta. Agus said he needed to find extra income to cover other expenses, such as transportation and his family’s needs.

“I try to sell perfume that I make myself. The results are not that bad — I can earn about Rp 500,000 [a month]. Although the sales are not always steady, at least I can buy my wife and my 4-month-old son clothes,” he said.

Another worker, 37-year-old Septina Rahmi, said she had needed to take out loans from her friends and family as her salary sometimes could not cover her living expenses.

As a cashier at a bakery in Mangga Dua, North Jakarta, she receives Rp 1.3 million a month, while her expenses sometimes can reach around Rp 1.8 million.

Septina said that as her working hours were a little unusual, she needed to use public transportation to get to work, which increased her transportation expenses.

“When I need to go to work at 5 a.m., the public transportation doesn’t operate yet, or when I go home at midnight, some buses have stopped operating. So I must take an ojek [motorcycle taxi],” said Septina, who lives in Plumpang, North Jakarta, adding that she spends about Rp 500,000 per month on transportation.

The Jakarta administration’s remuneration board has recommended that the governor set next year’s minimum wage at Rp 1,497,838. The revised figure is still lower than the cost of basic living standards (KHL), of Rp 1,529,150.

Thousands of blue collar workers have announced that they will hold a week-long strike and rally across the capital, involving workers at the Nusantara Bonded Zone industrial estate in Cilincing, North Jakarta; Cakung and Pulogadung in East Jakarta; and the Transjakarta Bus Rapid Transit and commuter train network, starting Monday if the UMP isn’t raised to match the KHL.

A labor economist from the University of Indonesia, Suahasil Nazara, said that he believed that the remuneration board had considered all of the factors relevant to determining the minimum wage, including the KHL and companies’ operational costs.

The KHL, used by the board to determine the minimum wage, takes into account the price of food, clothes, housing, education, transportation and health in the assessment. Other determining factors are productivity, economic growth and market conditions.

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