TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Big demands haunt investors
Ahead of the annual negotiations on the minimum wage slated to begin next month, unions and employer associations in strategic industrial regions are preparing studies to gauge the value of labor
Change Size
A
head of the annual negotiations on the minimum wage slated to begin next month, unions and employer associations in strategic industrial regions are preparing studies to gauge the value of labor.
Early preparations are crucial, especially for employers, as they seek to avoid the fallout that happened in January, when tens of thousands of workers blocked the Jakarta–Cikarang toll road, denying access to about 3,000 factories in Bekasi, West Java.
The blockade was done in reaction to a court decision that annulled a West Java gubernatorial decree to increase the provincial minimum wages. The Bekasi chapter of the Indonesian Employers Association (Apindo), asked the court to overturn the decree, claiming that the governor had disregarded a deal brokered by the regional remuneration council.
In conjunction with the Bekasi labor action, thousands of workers in nearby Tangerang, Banten, rallied against a similar appeal filed by Apindo’s contesting a similar decree from Banten’s governor.
The two major labor actions led employers to withdraw legal complaints and increase worker salaries by up to 30.81 percent in Bekasi and 18.5 percent in Tangerang.
According to recent valuations made by the labor unions, the local minimum wage should be increased significantly in 2013.
Suparno, the chairman of the automotive unit of the Bekasi chapter of the Indonesian Metal Workers Federation (FSPMI), said that based on a survey conducted two weeks ago, the minimum wage should range from Rp 2.5 million (US$260.59) to Rp 3.3 million per month, much higher than Bekasi current’s highest minimum wage, Rp 1.49 million per month.
“The figure factors 84 components of the Decent Living Standard [KHL] index, up from 60 components this year, covering basic items excluded in the current wage calculation,” Suparno said, citing the inclusion of new necessary expenditures for workers such as mineral water, fans and cell phone vouchers.
Meanwhile, unions in Batam, Riau Islands, an industrial zone that saw some 5,000 workers destroy several police posts during a rally for higher wages in December, also want to include more components in the KHL, which serves as a benchmark for setting the minimum wage.
The head of the Batam chapter of the FSPMI, Suprapto, recently said that the group had determined that next year’s KHL should comprise 80 components and should be set at Rp 2.6 million for 2013, double the Rp 1.3 million agreed on for this year. Without the inclusion of the additional components, the KHL stood at Rp 1.83 million as of September, according to the Batam Remuneration Council.
Apindo chairman Sofjan Wanandi said the association would not agree to include additional components in the KHL for 2013.
Sofjan said that local and foreign investors would not meet the workers demands.
“Investors will simply walk out when labor costs are no longer competitive,” Sofjan said.
A source in the Japanese business community said that his concerns were mounting as previous wage increases have outpaced the inflation rate. In 2011, for example, the inflation rate was 3.79 percent, while wages climbed by more than 20 percent, the source said, speaking to The Jakarta Post on the condition of anonymity.
“Security issues are now more serious than ever. Labor unions come in and damage facilities. The government should step in, creating an environment in which labor and management can talk sincerely,” the source said.
