T

he Jakarta Remuneration Board set the 2013 minimum provincial wage for different sectors (UMSP) between 5 to 17 percent higher than the standard wage, despite there being no agreement between employers and workers.

Board chairman Deded Sukandar said on Sunday that although there was no deal between the two, the UMSP had to be set.

“There have been four bipartite meetings between employers and workers but no solution was reached. The board finally made a decision on Friday because we needed to settle this immediately,” Deded, who also works at the Jakarta Manpower and Transmigration Agency, said.

He added that the recommendation would be submitted to Governor Joko “Jokowi” Widodo on Monday.

Deded said that there were 11 top sectors that would use the new UMSP, including construction and public works at 15 percent of the new minimum wage; chemical, energy and mining at 7 percent; electronic and machinery at 17 percent; automotive at 17 percent; insurance and banking at 15 percent; and telecommunication at 10
percent.

“The administration will also issue a gubernatorial decree as the legal basis of UMSP for workers,” Deded said.

The city remuneration board set the 2013 minimum wage (UMP) at Rp 2,216,243 (US$228.60) or 44 percent higher than this year’s level of Rp 1.53 million.

The board also increased the calculated basic cost of living for a single worker by 32 percent to Rp 1.97 million from Rp 1.49 million per month. This amount was used as the main reference in defining the provincial minimum wage remuneration for 2013.

The board is chaired by officials from the city administration and representatives from labor unions and employers’ associations.

The deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Jakarta office Sarman Simanjorang said that they did not agree with the UMSP figure as it was considered too high.

“The increase in the new minimum wage will be a burden for us, and now we feel the burden on us further with this new wage for additional sectors,” he said.

He cited the example that if employers in the electronic and automotive sectors had to pay the new wage, 44 percent higher than the previous year with the additional 17 percent for UMSP, they would need to pay a total of 51 percent, equal with Rp 2,574,000.

Sarman said he expected the governor, fearing that there would be layoffs in many companies to compensate the high cost, not to sign the gubernatorial decree on the UMSP.

“If we could, we would want to pay the new wage,” he said.

In a similar situation to the settlement of the 2013 minimum wage, employers refused to sign the UMSP settlement document.