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Jakarta Post

Wages rise as strike goes on

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Sat, November 2, 2013   /  10:57 am
Wages rise as strike goes on

The Manpower and Transmigration Ministry announced on Friday that 12 provinces '€” including several hosting labor-intensive industries '€” had increased their 2014 minimum wages, in a move that businesses say could hurt the country'€™s investment climate.

'€œWe are still waiting for reports from provinces that have yet to raise their 2014 minimum wages for workers. The provinces are still waiting for approval from their respective governors,'€ Manpower and Transmigration Minister Muhaimin Iskandar said in Jakarta on Friday.

The 12 provinces are Central, West and South Kalimantan, Jambi, Southeast Sulawesi, West Sumatra, Bangka Belitung, Papua, Bengkulu, West Nusa Tenggara, Banten and Jakarta

According to the ministry, Jakarta has the highest monthly minimum wage at Rp 2.44 million (US$211), although the Bekasi administration announced that it had raised the minimum wage by 40 percent from Rp 2.1 million to Rp 2.9 million.

The wage increases in each province vary, depending on indicators such as the inflation rate, economic growth, workers'€™ purchasing power, basic cost of living and employers'€™ ability to pay.

On Friday, around 3 million workers in 20 provinces and 150 regencies continued their nationwide strike, which has paralyzed activities in around 40 industrial areas in Java, Sumatra, Sulawesi and Kalimantan.

Their demands include a 50 percent hike in their minimum wages, which should be implemented simultaneously in January 2014, and an end to job outsourcing and the contractual system.

They also want the government and House of Representatives to immediately pass the bill on housemaids into law and revise the newly enacted law on mass organizations, which they claim has been devised to silence labor unions.

The Jakarta administration office was surrounded by thousands of protesting workers on Friday when the administration announced a 11 percent increase in the province'€™s minimum wage from Rp 2.2 million to Rp 2.4 million.

The Jakarta Remuneration Council welcomed the minimum wage increase, saying that it had no problem with it as the increase was not much different from its recommendation of Rp 2.3 million.

'€œIt is not a problem for us,'€ Asrial Chaniago of the Remuneration Council said on Friday. .

The workers, however, were disappointed by the decision as they had urged the administration to raise the monthly wage to Rp 3.7 million.

'€œWorkers will challenge the administration'€™s decision in the State Administrative Court [PTUN] and they will continue to stage protests in front of the City Hall until their demand is met,'€ Said Iqbal, chairman of the Confederation of Indonesian Workers Union (KSPI), said.

Responding to the workers'€™ intention to file a lawsuit, Jakarta Deputy Governor Basuki '€œAhok'€ Tjahaja Purnama said that he welcomed the workers decision to challenge the administration'€™s decision at the PTUN.

The Riau Islands provincial administration increased the 2014 minimum wage to Rp 1.6 million, up from the current Rp 1.3 million per month. A demonstration demanding the government increase the minimum wage continued on Friday in Batam.

A number of industries decided to shift their operations to the evenings to prevent their workers from joining the strike.

The workers who gathered in front of the Batam administration called for their demand for a 50 percent rise from the current Rp 2 million to be accepted.

Indonesian Employers Association (Apindo) chairman Sofjan Wanandi said the Jakarta administration'€™s decision to raise the minimum wage would only add to the burden of small-scale businesses.

'€œLast year, the small businesses requested a waiver because they could not afford to pay [increased wages]. This year, they will likely ask for another waiver or they will be forced to shut,'€ he said.

Sofjan pointed out that investors had already threatened to withdraw their capital from Indonesia because they were no longer able to pay workers'€™ wages. Investors, he said, would prefer to move their investments to other countries where they could find cheaper staff.

Sofjan said many investors had left the country in the first six months of 2012 due to the unstable investment climate, which caused around 200,000 workers to lose their jobs.

'€œWe are still calculating the exact financial losses suffered by businesses due to the two-day nationwide strike [on Thursday and Friday], but we predict that they will amount to hundreds of billions of rupiah,'€ he told The Jakarta Post on Friday.

Activities at industrial estates in Pulogadung and Cakung in Jakarta and surrounding areas were suspended on Thursday as tens
of thousands of workers stayed away from their workplaces and staged strikes to demand better conditions.

Major manufacturers, such as home appliance maker PT Maspion in West Cikarang and carmaker PT Suzuki Indomobil in Tambun, both in Bekasi, halted production to allow their workers to take part in demonstrations. (hrl)

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