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Jakarta Post

City workers seek 68 percent increase in minimum wage

  • Sita W. Dewi and Fikri Zaki Muhammadi

    The Jakarta Post

Jakarta   /   Wed, August 21, 2013   /  08:24 am

The Jakarta Labor Forum demanded on Tuesday that the city administration increase the provincial minimum wage (UMP) by a staggering 68 percent to Rp 3.7 million (US$350), from the current Rp 2.2 million. The demand comes amid the recent layoffs by companies that could not meet the current wage rate.

In January 2012, the city government raised the minimum wage to its current level from Rp 1.5 million.

Forum secretary general Muhammad Toha said that the demand was quite plausible and in line with the statement made by Deputy Governor Basuki '€œAhok'€ Tjahaja Purnama who said that the standard living cost in Jakarta was
Rp 4 million.

'€œThis figure makes sense,'€ Toha said. '€œWe are entitled to uphold our rights. We have been humiliated for a long time.'€

Toha said that the velocity of money in the city accounts for 60 percent of the national total, hence, it is fair for laborers in the capital city to get higher pay than those in other cities.

To make their plans heard, labors under the forum and the Confederation of Indonesian Workers Union (KSPI) said that 30,000 members would take to the streets on Sept. 3, 5 and 7, to air their grievances.

The confederation stated that its members would hold a national strike in October and or November should the government fail to increase the minimum wage by at least 50 percent next year.

KSPI president Said Iqbal compared the rates in the Philippines and Thailand, which reached Rp 2.8 million and Rp 3.2 million respectively. More than that, as Indonesia is one of the main global investment destinations with an average growth of 6 percent, laborers should have been paid better, he added.

The 50 percent increase demand was based on the 30 percent decrease in the workers'€™ purchasing power due to the fuel price hike, 10 percent inflation rate and 6.2 percent economic growth forecast in 2014.

'€œWe are just maintaining our purchasing power by this demand,'€ Said said.

Indonesia Employers Association (Apindo) Jakarta chapter chairman Soeprayitno played down the latest demands of the laborers, saying that '€œit doesn'€™t make sense'€.

'€œIf the minimum wage was set at Rp 3.7 million per month, many labor-intensive companies will collapse,'€ he told The Jakarta Post in a telephone interview.

Soeprayitno also called on labor unions to discuss such issues with the stakeholders before making such demands.

'€œWe should comply with the regulations; minimum wage is set based on tripartite agreement involving the government, employers and laborers. Why demand something that we haven'€™t discussed yet?'€ he said, adding that employers had already accommodated demands last year when Governor Joko '€œJokowi'€ Widodo decided to raise the capital'€™s minimum wage significantly by 40 percent.

Ahok said that the city administration would unlikely increase the capital'€™s current minimum wage.

'€œTo live comfortably in Jakarta, one needs at least Rp 3.5 million. That'€™s why a company that can'€™t comply with that shouldn'€™t operate in Jakarta in the first place. However, another problem arises: other regions don'€™t have the supporting infrastructure that the capital does. These are the matters that the central government should think about,'€ Ahok said.

He explained further that another minimum wage increase could lead to other social problems.

'€œIf the layoffs continue because the companies fail to cope with the minimum wage, Jakarta will see more unemployed people, who will likely live in slums or become street vendors. The city administration will subsequently have to relocate them and so on. It'€™s complicated,'€ he said.

Manpower and Transmigration Minister Muhaimin Iskandar acknowledged that Jakarta was not suitable for labor-intensive companies.

'€œCentral Java and East Java are more suitable for labor-intensive companies,'€ he said, adding that the central government planned to shift the industrial centers to regions with lower living costs.

Nurfika Osman contributed to the story.

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