T

he Indonesia Metal Workers Federation (FSPMI) in Batam, Riau Islands, will hold a rally on Thursday to demand an almost 50 percent rise in the 2015 city minimum wage (UMK).

The union, known for its uncompromising stances, claimed the weak exchange rate of the rupiah against the Singapore dollar over the last year had caused the real value of the UMK to drop.

Batam branch FSPMI leader Suprapto told The Jakarta Post on Wednesday that his union would stage a rally involving as many as 5,000 people at the Batam Free Trade Zone Authority (BPK FTZ) office and Batam city hall.

'€œWe demand a UMK of Rp 3.5 million (US$288.4) next year as well as a rise in the basic cost of living (KHL) components from 60 to 84 items, including monthly newspaper subscriptions and recreational allowances, so as to improve workers'€™ lives,'€ said Suprapto. The current UMK is Rp 2.4 million ($97).

According to Suprapto, the 2015 Batam UMK negotiations, involving the Batam municipality, Batam Manpower Office and the Indonesian Employers Association (Apindo), will take place in mid-October with approval by Jan. 1 next year.

'€œThe Batam UMK should be approved by November at the latest. We expect the amount to meet our demands,'€ said Suprapto.

He went on to claim that a UMK of Rp 3.5 million would not burden employers or investors in Batam, because based on FSPMI calculations, the rupiah had dropped from Rp 8,200 per Singapore dollar last year to the current exchange rate of Rp 9,320 per Singapore dollar.

'€œThis year'€™s UMK has dropped by S$40. Don'€™t the workers deserve to be awarded the difference?'€ asked Suprapto.

According to BPK FTZ data, a majority of the 588 foreign investors in the region are involved in the electronics manufacturing sector. Four hundred and ten of them come from Singapore, 52 are from Malaysia, 23 from Taiwan and 19 from South Korea.

Batam Manpower Office head Zarefriadi said the UMK was calculated according to a study of the KHL, which showed the KHL stood at RP 2,158,476 in September, or a rise of Rp 46,433 from August.

The KHL is based on a survey by the Batam Remuneration Council with input from labor unions, employers and the government. The KHL is based on 60 components and approved by a ministerial decree.

'€œThe KHL will serve as a reference for the next decision on the UMK. The workers'€™ demand is justifiable, as it'€™s just a request,'€ said Zarefriadi.

Since 2011, a coalition of labor unions, spearheaded by the FSPMI, has racked up the pressure each time Batam decides its UMK. In 2011, riots broke out in a number of spots and the Batam municipal office was vandalized. Consequently, the 2012 Batam UMK was lifted from Rp 1,180,000 to Rp 1,402,000, a rise of Rp 222,000, the highest UMK hike in the country.

The Batam UMK was set at Rp 2,040,000 in 2013 and Rp 2,422,000 in 2014.

Investors have frequently complained about what they see as unpredictable and drastic increases in the Batam UMK, with some choosing to leave Batam and invest elsewhere. PT Nidec Seimitsu Batam, based in Japan, for example, decided to close its Batam factory and relocate to Vietnam, where production costs are cheaper.