Tuesday, 9 July 2013


Entrepreneurs believed that the wage increase is not yet proportional to the increase in productivity. This means that workers’ demand is not proportional (linear) to their performance. Therefore, the Indonesian Employers Association (Apindo), firmly rejected workers demand for wage increase of up to 50% after the subsidized fuel price hike. Chairman of Apindo, Sofjan Wanandi, in Jakarta on Monday (June 24) said that increase Provincial Minimum Wage (UMP) does not guarantee an increase in the productivity of workers.
According to sofjan, it is better it entrepreneurs add machines and other advanced equipment rather than increasing the number of workers or continue to fulfill demand of workers. Because based on experience, the wage paid by employers is not proportional to the work produced of the company. Related to workers demand to increase wage by 50%, sofjan said that he will first discuss with the Remuneration Board and tripartite institutions. They will decide next year, and this year, Apindo will continue to collect data and conduct further survey. “It seems hard for us to raise wages up to 50%, moreover their productivity is still not satisfactory”, Sofjan said.
Sofjan admitted that he was stuck with the government’s policy to increase subsidized fuel price. He considered that the momentum to increase subsidized fuel price is not right. First, the policy was decided in a political year and when the US Dollar exchange rate is rising against the rupiah. In addition, pressure of the workers union on employers to re increase UMP is felt to make the position of employment increasingly cornered. Sofyan complained that the workers pressured the government not to raise fuel price, but those companies became the targets of anger of the workers.
Meanwhile, for the adjustment of price of nine basic commodities (sembako), he said that entrepreneurs have committed to neutralize the price as normally as possible. The rise in price of sembako will be adjusted to the increase in public transport fares after the fuel price increase. However, Apindo cannot guarantee that it can control fresh ingredients, such as vegetables. Availability to sembako, which can be controlled are, amongst others, industrial goods, noodles, sugar, cooking oil, and soybean. Sofjan asked the government and the central bank to stabilize the Rupiah against the Dollar to a maximum of Rp.9,700.
Sofjan also urged the government and the organization of Land Transportation Owners (Organda) to soon determine public transport fares after the fuel price increase. Organda proposed an increase in public transport fares 30% after the fuel price hike. The reason, according to sofjan, transportation plays an important role for the smooth distribution of goods and services traded by entrepreneurs. With the increase in public transport fares, entrepreneurs will adjust the price of goods and services they traded. But, sofjan guaranteed that although public transport fares will rise by 30%, entrepreneurs will only adjust the maximum price at 5%.
Sofjan complained that drivers have been raising public transport fares, even though there is no agreement between the government and Organda. He said that currently there are a lot of drivers who raise rates at will. Until now, he said, it is too long to wait for government to negotiate. These issues should have been discussed before deciding on fare hike. He admitted that in the past five years, Organda did not raise public transport fares. Thus, the increase in fuel rates, he said, is the most appropriate moment to raise public transport fares by 30%. “But, the increase should be within the bounds of reasonableness”, he said. (E) 

Business News - June 26,2013      

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