Jakarta Govt Sets Decent Living Index at Rp 2.5m

Jakarta Globe, Lenny Tristia Tambun, Nov 07, 2014

Jakarta's government has set the capital's Decent Living Index at Rp 2.5 million
($206) for 2015, a strong signal to workers that minimum wages are unlikely
to increase substantially. (Reuters Photo/Beawiharta)

Jakarta. In a strong signal to workers that next week’s minimum wage announcement may not fulfill expectations, Jakarta City Council has set the capital’s Decent Living Index at Rp 2.5 million ($206) for 2015.

The index, or KHL, which is used to define the minimum amount needed to sustain a “decent” quality of life in the capital, is the key determinant used to set the city’s monthly minimum wage.

Priyono, the head of the Jakarta Manpower and Transmigration Agency, said the index (KHL) was decided on Thursday night and set at Rp 2,538,174 — a jump from Rp 2.4 million this year.

“We plan to announce the official minimum wage on Wednesday next week, we have made a deal and we have signed it,” Priyono said. Jakarta’s minimum wage was scheduled to be announced this week, but was delayed.

The index took into account the cost for quality water, transportation, rent and instant noodles, Priyono said.

The decision is a blow to labor unions, who are seeking a wage rise of 30 percent for workers.

Rusdi, secretary general of the Confederation of Indonesia Labor Union (KSPI), said workers were expecting the minimum wage to be set at Rp 3 million.

Jakarta’s Acting Governor Basuki Tjahaja Purnama has previously said minimum wages should be in line with the the KHL and many businesses would face bankruptcy if wages were to be set at Rp 3 million.