Jakarta – Many employers have voiced strong opposition to the minimum wage hikes of Jan. 1, 2008, saying the remuneration policy should be revised to maintain a conducive investment climate in the country.
Employers in the industrial zone of Riau Islands have filed a lawsuit at the State Administrative Court against an 11 percent increase in monthly wages to Rp 960,000 (US$100) from Rp 860,000 in 2007, while more than 43 labor-intensive industries in West Java have filed a request to postpone the increase.
Deputy chairman of the Riau Islands chapter of the Indonesian Employers's Association (Apindo), Abdullah Gose, said employers would pay workers at the previous rate until the court made a decision.
"If we are defeated in the case, we will appeal to the Supreme Court until the governor reviews his decree on the new minimum wage," he told The Jakarta Post in Batam on Friday.
Employers in Batam and Bintan expressed their objection to the hikes because of the soaring world fuel price which has triggered high prices in raw materials.
"Many investors are relocating their factories to China and Vietnam partly because of the unpredictable wage hikes which have affected the investment climate in the country," said Abdullah.
In Bandung, West Java, chief of the manpower and transmigration office Sukarto Karnen said many employers had requested exemption from the new wages because of economic difficulties.
He said it was the governor's prerogative to accept or reject the request, but labor inspectors could refer to the governor's decree on the new wage hike in conducting the industrial relations supervision.
"We are waiting on an official response from the governor on the requests," he said.
The West Java minimum wage has been raised by almost ten percent to Rp 568,000 per month from Rp 516,000 in 2007.
Employers, mostly owners of garment and shoe factories, have blamed the economic difficulties on the flow of Chinese products and garments into the country.
Employers in North Sumatra said the wage increase was too high considering the year-long blackout in 2007.
"The disturbed supply of power and liquefied natural gas to industrial zones in addition to the four-times-a-day blackout in North Sumatra have caused trillions of rupiah in losses to investors in the province, and the new wage hike has been a special headache to most employers," chairman of the province chapter of Apindo, Parlindungan Purba, told the Post in Medan.
The minimum wage in the province was raised by eight percent to Rp 820,000 per month from Rp 720,000 in 2007.
Parlindungan called on the government to review the minimum wages once every three years, instead of annually, to create a conducive climate for investors in the country.
"Each year the government reviews the minimum wage, employers and employers are involved in industrial disputes and this disturbs the investment climate and security," he said.
The chairman of the province chapter of the Confederation of Indonesian Prosperous Labor Union, Yos Waruwu, said most workers and labor unions opposed the low hike, which he said would only maintain workers' purchasing power.
"Employers should not only demand to be understood but should also understand the workers's poor livelihood," he said, adding that the ideal minimum wage for a married worker in the province was Rp 1.2 million.