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Low-income workers hit hardest by inflation
Workers have enjoyed frequent wage increases in recent years
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orkers have enjoyed frequent wage increases in recent years. However, high inflation has eroded their real income and purchasing power, leading them deeper into poverty.
As a construction worker in Jakarta, Umar, 46, is usually paid Rp 120,000 (US$9.16) for eight hours of work per day. Even though his daily wage has increased by 20 percent from Rp 100,000 last year, nothing has really changed for him.
During the recent Idul Fitri holiday season, he decided against returning to his hometown in Yogyakarta for the 12th consecutive year as he had to allocate savings for more urgent needs, such as school tuition for his four children.
“My daily wage as a construction worker doesn’t help much. That’s why I sometimes moonlight as a driver or security guard,” he told The Jakarta Post recently.
The Central Statistics Agency (BPS) reported on Friday that the average daily income of construction workers nationwide increased slightly by 0.43 percent to Rp 82,028 in June, from Rp 81,677 in the previous month.
However, when inflation was taken into account, real income had decreased to Rp 65,997, from Rp 66,146 during the same period.
The daily wage of agricultural workers, meanwhile, increased 0.21 percent to Rp 47,898 in June, from Rp 47,796 in the previous month, while real income plunged to Rp 37,421, from Rp 37,563. The wage increases have also been belittled by the inflation rate that stood at 0.66 percent in June, the highest monthly rate so far this year due to seasonal price pickups during the Ramadhan fasting month.
The country, meanwhile, booked 3.45 percent inflation year-on-year (yoy) last month.
Considering this situation, Indonesian Farmers Union (SPI) chairman Henry Saragih called on the government to regulate higher minimum wages for workers in informal and agriculture sectors.
He also said monoculture farming and rapid industrialization had forced people in rural areas to incur higher living costs, as they found it harder to produce their own food.
“Previously, many villagers were able to gather food from nature, such as catching fish from the river or picking vegetables from the garden. Now they have to buy almost everything, resulting in the value of their wages to plummet,” Henry said.
Providing an example, Henry said agricultural workers in North Sumatra should be paid at least Rp 200,000 per day.
According to Jakarta-based think tank Center for Public Policy Transformation, there was a 115 percent increase in the country’s average minimum wage between 2008 and 2014.
However, of the country’s 118 million workers, only 20 percent of them from the formal sector enjoyed the hefty increase.
Meanwhile, the wages of the remaining 80 percent had decreased, particularly those working in the agricultural and informal sectors, such as construction.
On the other hand, BPS deputy head of distribution and statistics Sasmito Hadi Wibowo has forecast that wages of workers in the aforementioned sectors year will be stable in the second half of the year.
“Considering the current global economic climate, companies might hold off from significantly increasing staff numbers. So there’s not going to be a drastic change in workers’ wages,” he said.
Despite labeling itself an agricultural country, Indonesia has seen a continuous decline in its number of farmers by an average 1.93 percent each year between 2010 and 2014.
The sector’s contribution to the gross domestic product (GDP) has fallen from 15.2 percent in 2003 to 14.4 percent a decade later.
A lack of regeneration in the country’s agriculture sector could jeopardize food security in the future. Only 12 percent of the country’s 35 million farmers are under 35 years old. (vps)
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