Rizal Harahap, Pekanbaru – After lengthy and tough negotiations that had been going on since early October, the Riau Remuneration Council eventually agreed to a monthly 2013 Provincial Minimum Wage (UMP) set at Rp 1.4 million (US$155), or an increase of 13.08 percent from the current Rp 1.238 million.
Riau Manpower, Transmigration and Population Agency head Nazaruddin said the UMP negotiation was at one point postponed because many of the wage components had to be put into consideration, including the basic cost of living (KHL), consumer price index, company capacity, UMP of neighboring provinces and job market conditions.
"The number of items being discussed is also higher, such as the KHL standard, which was based on 46 items that we decided earlier. But now, based on Manpower and Transmigration Ministerial Decree No. 13/2012, the component and achievement stage of KHL are determined by 60 items of needs," said Nazaruddin, who also heads the Riau Remuneration Council, on Monday.
He cited that two parties – the employers and workers – had contrasting points of views that were difficult to reconcile.
"Workers' representatives insisted that the new UMP should be set in line with the KHL, or around Rp 2 million, while employers wanted the UMP percentage increase to not be too high compared to the current UMP," Nazaruddin said.
"But both sides have mutually agreed the UMP be set at Rp 1.4 million per month as it represents the interests of every party. The increase of 13.08 percent is quite reasonable for the current conditions," he added.
According to him, the remuneration council's decision has been reported to the Riau governor for approval to be put into effect as of Jan. 1 next year.
"The Riau UMP will serve as a reference for the regency and mayoralty administrations in setting the minimum wage in the respective regions," he said. "Every employer in Riau must abide by the UMP. Violators will be given stiff sanctions in line with Manpower Law No. 13/2003," said Nazaruddin.
Remuneration council member and regional coordinator of the Riau chapter of the Indonesian Prosperous Workers Confederation, Patar Sitanggang, deemed that the 2013 UMP could never be able to improve the welfare of workers, as the amount of UMP was still a far cry from the KHL of an unmarried worker.
"Workers actually have never demanded improper wages, but employers, like always, remain adamant and demand lower wage increases," said Patar. "Workers only wish to be treated more humanely. We are also humans who have living costs that keep increasing, so wage adjustments cannot be avoided," he added.
On the other hand, another remuneration council member who is also Riau Chamber of Commerce executive director, Muhammad Herwan, acknowledged that he was quite reluctant to approve the increase in the 2013 UMP.
"The business world is very supportive and understands the importance of improving the welfare of workers, but 2013 will be full of upheavals and challenges. The sluggish economy, such as drops in exports, the planned increase in basic power rates and the cuts in subsidized fuel are still haunting the business sector. Political agendas, such as the gubernatorial election, will also have direct impact on business activities," said Herwan.
"But for the sake of togetherness, the businesspeople will make efforts to implement the decision as best as possible. Hopefully, the new UMP will further invigorate the business sector," he added.