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Jakarta Post

Ramayana expects higher sales on minimum wage increase

  • Mariel Grazella

    The Jakarta Post

Jakarta   /   Wed, November 28 2012   /  11:26 am

PT Ramayana Lestari Sentosa (RALS) said that the minimum-wage increments, although a burden on operating costs, would ultimately benefit the retailer as their target market, the middle and lower income segment, would have a higher disposable income.

Several administrations in Indonesia, especially those that are home to large industrial complexes, have increased their regional minimum wages. The Jakarta administration recently fixed the 2013 minimum wage at Rp 2.2 million (US$228), 44 percent higher than that of 2012.

RALS finance director, Suryanto, said that the minimum-wage increments would, at the very least, trigger a 21 percent increase in payroll expenses. “However, this situation also presents an opportunity. Our target customers will have more disposable income thanks to their wage increases. This is as long as inflation remains at low levels,” he said.