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Jakarta Post

Basic cost of living components determined

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Mon, October 28, 2013   /  07:52 am

The city's tripartite wage committee recently completed a survey on price increases over the past ten months and set the basic cost of living (BCL) at Rp 2.3 million (US$220).

The BCL will inform the minimum wage hike, due in January 2014.

Sarman Simanjorang, a member of the local wage committee, revealed that the BCL was high because of a spat between workers and employers over the rent component.

Workers insisted that affordable rent in the city was Rp 800,000 per month while employers said it was Rp 570,000, he said. In addition, workers proposed Rp 2.7 million to be a more realistic BCL.

Previously, workers proposed 80 wage components to replace the existing 60 included in the 2007 wage component ministerial decree because the decree did not include components such as communication and IT facilities and recreation.

'€œNeutral members representing the city administration finally offered an amicable solution [to the rent issue],'€ quoted Sarman saying on Sunday.

He added that those representing workers at the committee's plenary meeting, held on Sunday, walked out and the majority of members had to make the decision.

The wage hike will be discussed at another plenary session and the proposed increase will be handed over to the governor for approval through a gubernatorial decree.

Workers have demanded the city administration raise the minimum wage to Rp 3.7 million from the current Rp 2.2 million but it has met strong rejection from employers while Governor Joko '€œJokowi'€ Widodo said workers' demands could not be met because of slow economic growth this year.

A number of labor-intensive companies have made their workers redundant and relocated to Central Java where the minimum wages were lower than Jakarta and its surrounding areas.

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