T

he Jakarta administration has said it would likely set the 2017 minimum wage at between Rp 3.2 million (US$290) and Rp 3.4 million per month, crushing the hopes of the city’s blue collar workers who have demanded a higher base salary of Rp 3.8 million.

Governor Basuki “Ahok” Tjahaja Purnama said he would stick to the existing regulation in deciding the city’s minimum wage.

Government Regulation (PP) No. 78/2015 on minimum wage stipulates that the annual minimum wage increase should be based on the city’s inflation and economic growth rate.

Previously, before the regulation was implemented, the calculation for the minimum wage was based on a cost of living (KHL) survey.

“No, it [the minimum wage] will not be set at Rp 3.8 million,” Ahok said at City Hall on Thursday. “I think the minimum wage will be around Rp 3.2 million or Rp 3.4 million.”

Ahok argued that inflation in the capital only reached 3 percent last year so it would be impossible to raise the minimum wage from Rp 3.1 million to Rp 3.8 million.

“We are just following the [government] regulation,” he said.

The Jakarta tripartite wage committee, which comprises city administration officials and representatives of employers associations and labor unions, have failed to reach an agreement on the amount of the 2017
minimum wage.

They were supposed to come up with a fixed figure to be proposed to the governor on Wednesday.

The workers insisted that the calculation for the wage increase be based on the KHL survey they conducted, a proposal that the employers could not accept.

The employers suggested Rp 3.35 million, 8.1 percent higher than the current Rp 3.1 million, after they formulated the amount based on the 2015 government regulation.

The workers claimed they should get at least Rp 3.49 million as that was the minimum needed to live in the capital today.

By calculating other components including the inflation outlook and economic growth, the labor unions eventually decided that the minimum wage should be set at Rp 3.8 million or 23 percent higher than the current minimum monthly salary, they said.

Ahok had to determine the new minimum wage by Nov. 1 as he would have to take leave for the upcoming gubernatorial election campaign, said the head of the Manpower and Transmigration Agency Priyono separately on Thursday.

“The wage committee is only obligatory to recommend [the amount] to the governor. We will let the governor determine [the minimum wage],” he said.

According to the Indonesian Workers Association (ASPEK), Jakarta had a lower minimum wage than its satellite cities including Bekasi and Karawang in West Java.

Bekasi City’s 2016 minimum wage is Rp 3.32 million, while the current minimum wage of Karawang is Rp 3.33 million.