Andreas D. Arditya, Jakarta – The Jakarta administration has issued a new regulation on the minimum wages for people working in several lucrative business sectors, setting them between 5 and 30 percent higher than provincial-wide salaries.
The new regulation came late, with a ministerial decree requiring provincial governments to decide on a new minimum wage two months before the new policy takes effect on Jan. 1 each year.
Jakarta Manpower and Transmigration Agency head Deded Sukendar on Monday said that the new regulation was signed last week, setting higher wages for 10 lucrative sectors.
The provincial minimum wage has been set at Rp 1,529,150 (US$167) per month, which applied for an unmarried worker with less than one year's work experience.
The 10 lucrative sectors in the capital are infrastructure and public works; chemical, energy and mining; metal, electronics and machinery; automotive; insurance and banking; food and beverage; health and pharmacy; textile, clothing and leather; tourism and communications.
The two sectors that received the highest increases of 30 percent are the communications sector and insurance and banking sector. Last year, the two sectors were only 7 and 10 percent higher than the minimum wage.
"Both sectors have made major contributions to the city's economy," Deded said. With the approval, the sectors were not only the highest paying in the capital but also in Indonesia.
Dissatisfied with the new policy, Korean textile manufacturers in Jakarta plan to relocate factories to Myanmar or Vietnam where workers' wages were lesser.
Deputy chairman of the Korean Garment Association in Indonesia, Eung-sik, on Monday said that at least 96 investors were considering to move production away from the industrial zone in Cakung, North Jakarta, following the wage rises.
Tempo.co reported that Bambang Haryanto, human resources development manager of the Cakung zone, said that textile industry had previously not been categorized as lucrative. "It's already hard for us to meet the new minimum wage, let alone the sectoral wage," he said.
The Jakarta Labor Forum, an umbrella organization for workers unions, gave a lukewarm response to the decision and demanded that the city administration include retail sector as one of the lucrative sectors.
"The increases should had been higher. The city only gave an average 16 percent increase for the lucrative sectors," forum spokesman Muhammad Rusdi said.
The Jakarta chapter of the Indonesian Employers Association (Apindo) previously protested against the sectoral wages, saying they were not necessary and could be counterproductive.
Business owners who fail to meet the minimum wages face fines of up to Rp 400 million and a maximum four years in jail. Waivers are granted to businesses in financial strife.