Joko Sets Jakarta Minimum Wage at Rp 2.4m

Jakarta Globe, Arientha Primanita, SP/Deti Mega Purnamasari & Lenny Tristia Tambun, November 1, 2013

Workers protest at an industrial area in Jakarta as part of a nationwide strike
over wages on Oct. 31. (EPA Photo)

Jakarta Governor Joko Widodo on Friday set the capital’s minimum wage for 2014 at Rp 2.4 million ($213) per month, a far cry from the Rp 3.7 million previously demanded by the city’s workers.

“The [wage] has been decided at Rp 2,441,301.74,” Joko told reporters at City Hall. “That is the agreement, and I have signed it.”

He said that he agreed on the new minimum wage after balancing the country’s economic growth with the cost of living for its low-paid workers. The increase will, however, be wiped out in real terms by inflation.

On Thursday, the Jakarta Wage Council — a body made up of city administrators, employers and workers — held a meeting and proposed two options for the 2014 wage. Employers suggested Rp 2,299,860.33, while city administration officials suggested Rp. 2,441,301.74. Afterwards they forwarded both recommendations to Joko in order for him to determine the best option.

The new figure represents a 10 percent increase from last year’s minimum wage, which was set at Rp 2.2 million. The number, though, is still far lower than the Rp 3.7 million the nation’s laborers had been calling for widespread during strikes on Thursday and Friday.

Regarding his decision, Joko said he is ready to face protests and potential legal suits filed against him by labor unions.

“Last year we increased the wage nearly 50 percent and I was still protested,” Joko said. “I think all decisions have risks. Whatever that is, we have made a decision based on the wage council meeting.”

The workers representatives, however, did not attend the meeting.

Once set, companies must oblige with the new wage based on the 2003 Law on Manpower.

Sarman Simanjorang, the deputy head of the Jakarta branch of the Indonesian Chamber of Commerce and Industry (Kadin), said that employers will respect the city administration’s decision, even though many labor-intensive industries had requested no minimum wage increase for 2014.

“We will follow through with what the government has decided,” Sarman told the Jakarta Globe. “Maybe capital-intensive industries like service, banking and telecommunication sectors will not have any problems. But labor-intensive sectors such as the garment, textile and shoe industries — they will be affected. The increase is still normal.”

Companies that could not afford the increase, Sarman said, will ask the government for a postponement of the implementation based on their abilities to pay the workers.

He added that even though the workers did not attend the wage meeting, the new number will stand. Sarman referred to Presidential Instruction No. 9 on Minimum Wage, a regulation issued in 2013 which states that all provinces must announce a minimum wage on Nov. 1

Last year, when the 44 percent wage increase was determined, the employers did not attend the council meeting.

Meanwhile, Said Iqbal, chairman of the Confederation of Indonesian Workers (KSPI), said that the city’s unions rejected the new minimum wage.

“If Joko really approved that wage, that means that he does not side with the poor,” he told the Globe. “It means that he defends the employers’ interests.”

Said said the workers will file a legal suit to challenge the wage at the State Administrative Court (PTUN).

Meanwhile, thousands of workers from Jakarta, Bogor, Bekasi, Karawang, Purwakarta, Sukabumi, Semarang, Batam and Medan are set to continue their two-day strike on Friday. Some will still protest at industrial areas, while workers in Jakarta will concentrate their demonstrations at City Hall.

He added that workers in Bekasi will also protest at the National Police regarding the brawl they had with paramilitary youth organization Pemuda Pancasila that left eight people injured and 18 motorcycles destroyed in South Cikarang on Thursday morning.