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Remuneration board raises living cost standard by 32%
High hopes: Workers take time to conduct Friday prayers during a day-long rally for higher minimum wage in front of City Hall on Jl
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span class="inline inline-none">High hopes: Workers take time to conduct Friday prayers during a day-long rally for higher minimum wage in front of City Hall on Jl. Medan Merdeka Selatan in Central Jakarta. The City Remuneration Board will fix its standard cost of living at Rp 1.97 million (US$206), up by 32 percent from Rp 1.49 million set in 2011. (JP/P.J. Leo)
The Jakarta Remuneration Board on Friday increased the standard cost of living (KHL) by 32 percent to Rp 1.97 million (US$206) from Rp 1.49 million per month, and would use it as main reference to decide the provincial minimum wage remuneration for 2013.
Deputy Governor Basuki “Ahok” Tjahaja Purnama said that the city administration was satisfied with the amount set by the KHL.
“I believe we all have agreed on the KHL’s number. The governor [Joko ‘Jokowi’ Widodo] instructed for it to be a fair amount,” Ahok told reporters after attending the meeting with the Board at the City Hall.
The deputy governor said that the KHL had been calculated in line with predictions for expected inflation next year. “The amount was also influenced by a total of 60 components that are regulated by the Manpower and Transmigration Ministry,” Ahok said.
Labor representatives wanted a total of 122 components to influence the KHL; however, Ahok said the decision to do so falls under the ministry’s authority.
The deputy governor explained that the KHL calculations involved an obligation by the administration to present and assure the standard basic needs of city residents, including proper housing, education and health services.
“We are also obliged to maintain stable prices of basic commodities,” Ahok said.
The Remuneration Board is chaired by officials from the city administration, labor union representatives and employers’ associations.
The tripartite forum makes recommendations regarding minimum wages to the governor on an annual basis.
Nita Yudi, a member of the board representing the local chapter of the Indonesian Chambers of Commerce and Industry (Kadin), said that businessmen also agreed on the new KHL number.
“We do not have objections with it. We expect the process to go smoothly,” Nita told The Jakarta Post.
Failure to meet the minimum wage is punishable by law. Business owners face up to Rp 400 million in fines and one to four years in prison for violating the regulation.
Business owners, however, are allowed to request a waiver, which is only granted after audits prove that the business is undergoing financial difficulties.
A ministerial decree on minimum wages requires provincial governments to decide a new minimum wage two months before the new policy takes effect on Jan. 1 each year.
The minimum wage only applies to unmarried workers with under one year work experience.
Separately on Friday, Manpower and Transmigration Minister Muhaimin Iskandar held a meeting with Jokowi, West Java Governor Ahmad Heryawan and Banten Governor Ratu Atut Chosiyah on minimum wage deliberation.
Muhaimin said that the provincial minimum wage should be announced by Nov. 20 at the latest.
“Before the governors issue their new minimum wage decree, we will continue coordinating. We have agreed to keep monitoring developments,” the minister said at his office on Jl. Gatot Subroto in South Jakarta.
Also on Friday, thousands of workers staged a day-long rally in front of the City Hall demanding a new minimum wage of Rp 2.8 million.
Jokowi said the workers’ proposal would be taken into consideration.
“There are number of parties in this matter. We will seek out a win-win solution,” Jokowi said.
Last year, the city set monthly minimum wage to Rp 1.52 million, an increase from Rp 1.29 million in 2011, setting the minimum wage higher than the KHL for the first time in six years.
Ahmad said that Jakarta’s minimum wage was always higher than any other region, but expected a narrow gap with his region.
“We are hoping that Jakarta set a proper minimum wage, which will [influence] our region,” said the head of the neighboring province.
Jakarta is one of the primary destinations for labor-intensive industries. Other provinces with such industries include West Java, East Java, North Sumatra, Batam in Riau Islands, Central Java, East Kalimantan and South Sulawesi.
