Employers affiliated to a number of employers associations have pleaded with the government not to increase the minimum wage for 1998 because of the grave crisis which now has the country in its grip, following the dramatic fall in the value of the Indonesian currency.

They warned that any wage increase would compel companies to make redundancies or even to close down altogether. They said an understanding should be reached between employers and employees to ensure that business can continue.

The employers involved in this joint appeal are from the associations of textile companies, manufacturing companies, shoe companies, and toy companies, The plea was made at a meeting with officials of the Manpower ministry, the trade ministry and representatives of the FSPSI.

The Manpower Minister A Latief said that any decision on the minimum wage for 1998 will depend on economic developments. He said that no decision had yet been taken on the matter.

The representative of one employers association said the minimum wage should not be increased at a time when there was still great uncertainty about the rate at which the value of the currency would stablise. He acknowledged that wages were extremely low and adjustments would need to be made. 'It would be realistic to raise the minimum wage. What is not realistic is for us to go on paying a contribution to the social fund, Jamsostek.' He suggested that this contribution should be scrapped and the money saved should go to increase the minimum wage.

Employers from many regions who were present at the meeting also complained about cash flow problems because of the current tight money policy. One shoe company proprietor complained that companies have to bear the additional burden of paying extra levies, official as well as unofficial (he did not say that much of this burden goes to paying local military commands for their intervention in labour disputes).