GOVT ISSUES NEW REGULATION ON LABOR WAGE SYSTEM

by Andi Abdussalam

Jakarta, Oct 26 (Antara) - Beginning next year, workers will start receiving annual wage which is raised based the increase in the inflation and economic growth rates.          The policy to introduce the annual increase in the labor wage system was included in the government's fourth economic policy package issued last month.          In order to carry out the policy, the government issued a Government Regulation (PP) on Provincial Minimum Wage (UMP) on Friday, October 23. The UMP will become the basis for the annual wage increase for workers.         "We are grateful that the Government Regulation on Regional Minimum Wage has been signed by President Joko Widodo. It has been enacted into law. Thus, it is now in force. Governors will be required to use the law when deciding the provincial minimum wage (UMP) for next year (2016).  They should use the formula as provided in the Government Regulation," Manpower Minister H Hanif Dhakiri said after opening a coordination meeting on supervision and control at the Manpower Ministry's Office in Jakarta on Monday.         The minister said the issuance of the Government Regulation on the Provincial Minimum Wage is a breakthrough in the employment sector in Indonesia. This was because the decision to formulate the UMP was earlier dominated by various kinds of politics, leading to irrational wage hikes and uncertainty.

PROVINCES MUST FULFIL WORKERS' DECENT LIVING COST CRITERIA

By Andi Abdussalam

Jakarta, Oct 17 (Antara) - For Indonesian workers and employers, the government's announcement of its fourth economic policy package brought good news since it provided a sense of certainty to both, laborers and companies.          The package, which also deals with recipients of smallholders' credit and financial assistance for export-oriented small businesses, covered policies in the employment sector and is aimed at improving the welfare of workers through an annual wage hike scheme.          Based on the new policy, worker's minimum wages will increase every year, based on the economic growth and inflation.          The monthly minimum wage is the most crucial for workers since it will serve as the basis for the annual pay rise. If the economic and inflation rates increased by five percent each, the wage hike will be 10 percent of the monthly minimum wage.          As such, the minimum wage should meet the realistic cost of living, based on the decent living cost (KHL).          Therefore, all provinces in the country should meet the decent living cost in working out their provincial or regional minimum wages for workers.

WORKERS REJECT 15 PCT WAGE INCREASE PROPOSAL

By Andi Abdussalam

Jakarta, Dec 1 (ANTARA) - Industry Minister MS Hidayat's idea to raise regional minimum wages by 15 percent for labor-intensive and small industries was rejected by a workers association on Saturday.          The minister proposed the idea to raise regional minimum wages by 15 percent following the outcries of business officials, particularly small businesses, over the newly raised Jakarta minimum wage, setting the minimum wage at Rp2.2 million by Jakarta Governor Joko Widodo.          Chairman of the Indonesian Labor Workers Association (MPBI), Said Iqbal, said his organization was opposed to the minister's proposal for a 15 percent wage increase, as well as the opportunity for industries to file a request for a postponement of the new Jakarta minimum wage hike for next year.

WAGE INCREASE TRIGGERS INDUSTRY OUTCRIES

By Andi Abdussalam

Jakarta, Nov 29 (ANTARA) - Following increased demonstrations in Jakarta by workers who demanded wage increases and an end to the outsourcing of labor, the Jakarta governor decided on November 14, 2012 to raise the monthly regional minimum wage from Rp1.5 million to Rp2.2 million. However, Jakarta Governor Joko Widodo's move on wages is being viewed by the business community as harming labor-intensive industries since the wage increase far exceeded the basic living cost (KHL). Management is of the view that the ideal regional minimum wage (UMP) for Jakarta is about Rp1.9 million per month.          "KHL should ideally be set at Rp1.9 million, but the Jakarta governor has raised it to Rp2.2 million, or about 44 percent. This is just proof of the fact that the governor wants labor-intensive industries to slump and is encouraging them to relocate their factories from Jakarta," Ernovian G Ismy, secretary general of the Indonesian Textile Producers (API), said on Tuesday.  Further, some 60 companies will ask the Jakarta city administration to postpone the introduction of the 2013 minimum wage, saying that the Rp 2.2 million ($229) per month set by the government is too burdensome.