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Jakarta Post

Workers reject limit on minimum wage rise

  • Fikri Zaki Muhammadi

    The Jakarta Post

Jakarta   /   Sat, August 31, 2013   /  02:07 pm

The Jakarta Workers Forum on Friday urged the central government to cancel the presidential instruction (Inpres) that regulates wage rises, saying that if passed, workers would take to the streets and hold a national protest in October.

Forum secretary general Muhammad Toha said that workers in the capital would continue to fight for a 68 percent wage increase next year, to Rp 3.7 million (US$350) from the current Rp 2.2 million.

'€œWe are speaking in line with what the Deputy Governor Basuki '€œAhok'€ Tjahaja Purnama said, that a decent wage in Jakarta is Rp 4 million,'€ Toha said in a press conference on Friday. '€œWe will support him in not following the [presidential] instruction,'€ he added.

Toha said that the instruction was merely a result of the government'€™s fear that factories would shut down if wage rises continued. '€œWe have conducted research on this. We believe that no company will close because of the increase. It'€™s reasonable for them as well as for us,'€ he said.

Confederation of Indonesian Workers Union (KSPI) president Said Iqbal said that all labor unions in the country had agreed to protest against the instruction.

'€œThis is a blunder by the President. If the reason was the decline of the rupiah, the government should boost domestic consumer spending, so that the currency will rise again,'€ he said on Friday.

'€œThe same thing was done by the Barack Obama and Shinzo Abe administrations,'€ he said, referring to the United States and Japan.

Said said more than 30,000 workers would stage protests on Sept. 3, 5 and 10 in the capital and in other cities should the government fail to heed their protests. The workers will hold a national strike in October if the situation did not change he said. '€œThe Jakarta governor has to ignore this instruction and make his own calculations if he wants peace in the city,'€ Said said.

As part of the government'€™s efforts to avert further massive layoffs during the current economic slowdown, President Susilo Bambang Yudhoyono on Thursday signed a presidential instruction that set a new structure for minimum wages in labor-intensive industries.

The new formula, as regulated in the instruction, could be used at the end of the year to determine next year'€™s wage increase, which it is stipulated must not exceed current inflation plus 10 percent.

The Jakarta Legal Aid Institute (LBH Jakarta) stated that the instruction breached Law No. 12/2011 on legislative drafting. '€œThe law doesn'€™t recognize presidential instructions. Even if they exist, they should not regulate on something as they don'€™t have a legal basis,'€ Muhammad Isnur from the institute said. He added that the President also failed to include public participation in the drafting.

The Jakarta Wage Council stated that the instruction had hurt it by ignoring its role. The regulation may also interfere with the governor'€™s right to decide the provincial minimum wage (UMP) as mandated by Law No. 13/2003 on employment.

Ahok said that the main factor in determining the minimum wage was the calculation of the standard cost of living (KHL).

'€œWages should increase according to the KHL. The last increase was based on that calculation. So workers cannot ask for a 40 percent increase every year,'€ he said at City Hall on Friday.

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