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Jakarta Post

A wake-up call from Indonesia’s manufacturers to government

  • Erwin Aksa

Jakarta   /   Mon, December 10 2012   /  07:57 am

A recent incident saw labor union members shut down several factories in Indonesia by force as they demanded a higher minimum wage. This wreaked havoc in the country’s business certainty. Unfortunately, the government seems to believe it is the opposite.

As widely reported in the media, labor unions demanded that the government raise the national minimum wage by between 30 and 50 percent to around Rp 2.9 million (US$300).

Recently, the Jakarta provincial government set the provincial minimum wage at Rp 2.2 million, up by 40 percent from Rp 1.5 million in 2012.

As the government contemplated the request, some of the protests turned ugly. Those who refused to join the rallies were held hostage for hours.

The chaos prompted one of the country’s oldest foreign investors, whose footwear products has been famous among Indonesians for generations, to consider ex...