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Basic wage increased

Agence France Presse - February 19, 1999

Jakarta – The basic minimum wage in Indonesia's 27 provinces is to be raised an average 16.1 percent from April 1, reports said Friday.

However, companies that could not afford the raise should apply for a postponment, the director general for industrial relations and labour supervision, Syaufii Syamsuddin, was quoted by the Kompas daily as saying.

Syamsuddin said that despite the rise, the wage level would still only cover about 80 percent of the basic physical needs of a single worker. "The purchasing power of workers continues to weaken and the labor situation will further decline if such a decision is not made," he said. The increase was intended to slow the drastic decline in real wages since the onset of the economic crisis in 1997, he said.

The minimum wage applies to laborers who have worked for less than a year with a company, and who work 40 hours a week.

The highest percentage rise was for Riau province in Sumatra, where the minimum standard was raised 25.3 percent to 218,000 rupiah (24.8 dollars).

The lowest rise was for the province of Bengkulu in Sumatra, a mere 2.39 percent increase to 150,000 rupiah (17 dollars). The minimum monthly wage in Jakarta will be lifted 16.4 percent to 231,000 rupiah (26.25 dollars).

Under the new rates, the highest minimum wage level would be for the Batam industrial zone on Batam island, at 290,000 rupiah (33 dollars) after a 7.4 percent increase, followed by Jakarta then eight districts in West Java where the standard was set at 230,000 rupiah (26.1 dollars.)

Wages in the troubled territory of East Timor were raised 15.5 percent to 183,000 rupiah (20.8 dollars), in Irian Jaya the increase was 15.1 percent to 225,000 rupiah (25.6 dollars), and in another troubled province, Aceh, wages were raised by 16.3 percent to 171,000 rupiah (19.4 dollars).

The government, which announces wage increases every year, raised salary levels by an average of 15 percent last year, but following resistance from companies as the Indonesian economic crisis began to bite, the were only implemented on August 1, rather than April 1.