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New minimum wages panned by NGOs

Jakarta Post - February 23, 2000

Jakarta – The Jakarta Legal Aid Institute (LBH) and the Information System and Legal Education Institute (Sisbikum) have urged workers to reject the new regional minimum wages, saying the level was too low and against international standards.

Chief of LBH's labor division Surya Tjandra said the new monthly minimum wages that would take effect on April 1 were unrealistic amid current economic conditions and tantamount to labor exploitation. "The increase by an average of 25 percent is not a real hike and it will be enough only to cover the inflation rate," he said in a statement on Tuesday.

"It is not based on a deep concern for the poor condition of workers and of their families." The Ministry of Manpower announced on Monday the regional minimum wages would be raised between 15 percent and 55 percent.

The province of Aceh recorded the biggest increase of nearly 55 percent, with the minimum wage raised from Rp 171,000 to Rp 265,000. The lowest increases were in Bali where wage levels in the two regions in the area were raised about 14.6 percent, from Rp 187,000 to Rp 214,300 and Rp 166,000 to Rp 190,300.

Tjandra said employers continually justified their resistance to raising wages by citing difficult economic conditions and small profit margins. He dismissed the arguments and said most companies were not forthcoming about their revenues or plans for expansion. Resistance to raising wages, he added, would only serve to keep workers and their families in a perpetual state of poverty.

Tjandra urged the government to establish a regulation which would set a maximum annual profit which could be taken by a company, while the remaining revenue should be dispensed to workers through a better remuneration system.

He urged workers and labor unions to reject the new regional minimum wages because they failed to meet needs and expectations. "To be fair, a renegotiation should be done involving as many workers and labor unions as possible," he said.

Sisbikum's director Ariest Merdeka Sirait said the institute did not condone the government-sanctioned minimum wage system in the first place as it contradicted with International Labor Organization (ILO) Convention No. 115 on minimum wages. "The regional minimum wage also does not reflect workers' real needs. With such a bad remuneration system, labor exploitation will never end." He argued that as stipulated by the ILO convention which Indonesia ratified in 1981, the government should include factors such as obtaining clean water, education, health care, social security, family needs, shelter and clothing as components in setting the minimum wage.

"If the government and employers are consistent with the ILO convention, the monthly minimum wages should be between Rp 500,000 and Rp 750,000 at the lowest," he said. He added that staff employed at his institute were paid between Rp 750,000 and Rp 1 million per month.