T

he West Java provincial administration is set to compile a gubernatorial decree on determining wage increases for workers in the labor-intensive sector.

The decree will be valid only in the cities of Bekasi and Depok, as well as in the regencies of Bogor and Purwakarta, where many labor-intensive companies are based.

“Without a wage adjustment, industrial players have threatened to stop manufacturing activities in those areas. As a result, 100,000 people could lose their jobs,” West Java Governor Ahmad Heryawan said on Friday.

The governor’s move is a follow up to a meeting led by Vice President Jusuf Kalla in Jakarta on Thursday. During the meeting, which was also attended by Manpower Minister Hanif Dhakiri, Investment Coordinating Board (BKPM) chairman Thomas Lembong and representatives of employers and workers, the government attempted to respond to objections raised by 89 garment companies to the monthly urban minimum wage (UMK).

The calculation of wages for workers in the labor-intensive industry is not regulated in detail in Government Regulation (PP) No. 78/2015 on minimum wages, the companies claim.

“Under the PP, the increase in the minimum wage should be 8.25 percent. However, the minimum wage increase resulting from the calculation that must be paid by employers has soared to 30 percent,” said Heryawan.

The minimum wage of Rp 3 million (US$225.57) in West Java has long been a major problem for garment manufactures in the province. The wage is much higher than in other regencies and cities in Central Java, for instance. Boyolali and Salatiga, two new industrial zones for garment and footwear in Central Java, where the minimum wage for 2017 is only Rp 1.51 million and Rp 1.59 million, respectively.

To avoid layoffs and company closures, the government has decided to apply special wage rates for labor-intensive companies in West Java that will be set below the UMK.

According to the West Java Manpower Agency, labor-intensive firms in Bekasi city make textiles and textile products while Depok stands out for its garment industry. Garment and footwear are produced in Bogor regency while automotives is the outstanding labor-intensive industry for Purwakarta.

The Bukit Indah City (BIC) industrial complex, Purwakarta, is home to several big manufacturing companies such as PT Hino Motors Manufacturing Indonesia (HMMI), the local subsidiary of a Japanese commercial vehicle manufacturer, and PT Nissan Motor Indonesia.

Sedane Labor Information Institute researcher Syarif Hidayat said Heryawan’s move would be exceptionally beneficial to employers only. “Large and export-oriented industries must pay high wages,” said Syarif.

Garment worker Ririn Wahyuni from Bogor said the new wage scheme was discriminatory and unfair. “There should be no wage lower than the UMK. Even wages for sector-specific jobs should be higher than the UMK,” she said.