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.

Jakarta Post

Ahok approves wage hike to Rp 2.7 million in 2015

Newly sworn in Jakarta Governor Basuki “Ahok” Tjahaja Purnama signed on Wednesday a gubernatorial decree for the monthly minimum wage to rise by 12

Corry Elyda (The Jakarta Post)
Jakarta
Thu, November 20, 2014

Share This Article

Change Size

Ahok approves wage hike to Rp 2.7 million in 2015

N

ewly sworn in Jakarta Governor Basuki '€œAhok'€ Tjahaja Purnama signed on Wednesday a gubernatorial decree for the monthly minimum wage to rise by 12.5 percent to Rp 2.7 million (US$222) in 2015, up from the current Rp 2.4 million, despite strong opposition from workers.

'€œI will not tolerate it if any company does not comply with the gubernatorial decree. There will be no postponements,'€ he said, adding that the new fuel-price hike factor had been already included in the new wage.

A ministerial decree allows companies to file an official request to be exempted from the wage hike because of financial difficulties, but Ahok, who was inaugurated by President Joko '€œJokowi'€ Widodo as the new governor at the Presidential Palace, had previously called on troubled companies to relocate to other regions.

'€œWe will turn their location into commercial areas,'€ he said referring to several labor-intensive companies that had relocated to West and Central Java.

Manpower Agency head Priyono said the gubernatorial decree on the minimum wage hike, which was signed on Nov. 14, would be disseminated to all companies, especially in the industrial estates in Pulogadung, Cakung and Cilincing.

'€œWe will start disseminating the decree to all companies so that they have adequate time to make adjustments before the decree takes effect on Jan. 1, 2015,'€ he said.

Priyono said after setting the monthly minimum wage, labor unions and employers were scheduled to set the sectoral wages. '€œThe sectoral wages are usually higher than the minimum wage,'€ he said.

Priyono stressed that the city would not accept any requests from troubled companies to postpone the wage hike because the minimum wage was a social safety net for individual workers.

'€œAccording to our observations over the past few years, the same companies propose a postponement from one year to another,'€ he said.

He added that if the monthly minimum wage was deemed too high, companies should understand that it was a consequence of doing business in the capital.

'€œSo far, we have not received any reports of companies wanting to relocate their factories to other regions because of the wage hike,'€ he said.

The secretary-general of the All Indonesian Workers Organization (OPSI), Timbul Siregar, said that the minimum wage would not be sufficient to cover living costs next year.

'€œThe wage hike should be raised in anticipation of the poor conditions next month and in January,'€ he said.

Timbul said that when the Jakarta wage committee decided the standard cost of living of Rp 2.5 million, it had yet to include other factors, such as inflation and the soaring price of basic commodities.

'€œThe rise in fuel prices will affect index prices, including transportation fares, electricity and house rent,'€ he said, adding that with the low increase and the soaring price of basic commodities, workers'€™ purchasing power would weaken.

Timbul said the minimum wage ideally should be around Rp 2.9 million, as it is in Bekasi municipality.

He suggested that Ahok revise his decision and discuss it with labor unions and employers to seek a win-win solution.

'€œChallenging the decision at the Jakarta State Administrative Court will be the last stand,'€ he said.

Many workers have recently taken to the city'€™s streets, demanding the city administration raise the minimum wage to Rp 3.5 million from the current Rp 2.4 million.

The deputy chairman of the Jakarta chapter Indonesian Chamber of Commerce and Industry (Kadin), Sarman Simanjorang, said it was a dilemma for business entities when the government reduced the fuel subsidy because it would affect not only workers but also employers and all sectors.

'€œHowever, we have to accept the government policy and hopefully we will get compensation in the form of easier business license processes,'€ he said.

Regarding wage hike postponements, Sarman said these were allowed by the 2013 Labor Law. '€œThe governor cannot turn down any request for a wage hike postponement if the companies meet all the requirements set in the law,'€ he said.

Ministerial Decree No. 231/2003 on minimum wage postponement states that firms in financial difficulties are allowed to postpone a wage hike until they have been audited by an independent auditor and if the postponement is supported by their workers.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.