Employers can no longer use incompetence or a lack of productivity among their employees as a basis to determine wages.
The director general for training and productivity development at the Manpower and Transmigration Ministry, Abdul Wahab Bangkonang, said that employees who had worked for more than one year in the formal sector should have decent skills in their line of work, regardless of their educational background.
“The industrial process in labor-intensive companies, such as garment, footwear and textile factories, relies on simple technology that can be operated by workers who do not possess high qualifications. Workers face no competence problem in handling the technology after one simple training session and one year of employment,” he said.
Abdul Wahab blasted some employers, whom he labeled greedy, for locking their factories, laying off their workers and relocating abroad following the government decision to raise the local minimum wage.
He said the minimum wage in some cities in the country were in fact lower than the international standard.
“I don’t believe that employee incompetence and a lack of productivity should be used as a basis by employers to not pay decent wages. Even with the recent wage increase of up to 40 percent, small- and medium-sized companies will not suffer losses. Although these companies may face slimmer profit margins [due to the wage increase] large companies will not be affected at all,” he said.
The Indonesian Employers Association (Apindo) claimed recently that many Korean investors had already relocated to other Asian countries following the decision to significantly increase local minimum wages.
Other firms have pleaded with local governments to delay paying the increased wages after winning their workers’ support through bipartite negotiations. Almost 50 percent of 949 employers seeking government approval have been granted permission to postpone paying the higher wages, mostly due to financial difficulties.
Indonesian Workers Organization (OPSI) secretary-general Timboel Siregar criticized both the government and employers for failing to abide by the 2003 Labor Law, which stipulates mandatory training to improve the quality of human resources.
“Besides using labor training centers to train job seekers, the government has an obligation to introduce training policies requiring employers to improve their workers’ skills and productivity. Both the government and employers should change their mind-set to see such labor training not as a financial burden but as an investment to enable Indonesian workers to be competitive in today’s global economy” he said.
Payaman Simanjuntak, a professor of labor economy at the Krisnadwipayana University, questioned whether employers had the will to create good industrial relations with their workers.
He lamented the fact that after 68 years of national independence, workers and employers were still arguing about the minimum wage.
He also called on employers to respect workers by paying them decent wages regardless of their experience and competence.
“A firm’s productivity depends on the performance of its workers and management; so, workers deserve higher wages for their contribution to the productivity of their firms,” he said.
Payaman added that the minimum wage should only be applied to newly recruited and single workers.
Director of Apindo’s training department, Muhammad Aditya Warman, said many businesses’ decision to reject the basic minimum wage was motivated by the stance of Apindo chairman Sofjan Wanandi, who strongly opposed the recent wage hikes.
Aditya said that some of the businesses were run by foreign investors who engaged in rent-seeking activities.
“They [rogue investors] can easily escape because they use rented land and leased machinery,” he said.
Aditya added, however, that most employers had provided job training opportunities for their workers to improve their productivity, and they had no major problems with the wage increases.
He said Apindo had for a long time campaigned for labor regulations for investors to help create industrial harmony and a conducive business climate in the country.
“Many companies have created a harmonious atmosphere when investors comply with labor regulations and deploy a humane approach. Most workers feel proud and happy to work when their employers congratulate them on their birthdays or when they have a child,” he said.