Thursday, 17 October 2013


The demand voiced by some labor unions that the Provincial Minimum Wages [UMP] 2013 be Rp 3.7 million was regarded as not realistic. Moreover national economy was today in adverse condition due to global crisis. If the demand had to be fulfilled, the threat of mass dismissals would be inevitable. Chairman of the Indonesian Businessmen’s Association [APINDO] Sofjan Wanandi stated in Jakarta on Monday [9/9] his rejection to the demand. Sofyan underscored that employers and employees must comply with the national Board of Reimbursement about the stipulated minimum pay of Rp 2.2 million per month.

According to Sofjan, today it was most impossible for companies to once again increase pay when the domestic economy was in turbulence. According to Sofyan, the demanding workers had poor understanding of economic affairs. Sofjan felt that increase of wages was most impossible to be realized as the Government had just increased price of oil. Not to mention the case of depreciated Rupiah.

Sofjan disclosed that through 2013 workers’ productivity did nit even increase in spite of 40% salary increase particularly in Jabodetabek. Sofjan demanded workers not just demand wages increase but also increase productivity. He underscored that workers demand of salary increase up to 50% next year was workers’ right; but to refer to increase of wages this year, evidently workers performance was not uplifted by salary increase. He asked labor unions to be patient not to rush to propose wages increase of 2014, since negotiation at the Board of Reimbursement would only begin in October this year. As businessmen Sofjan did not mind salary increase as long as it was accompanied by productivity. Besides workers did not just refer to Decent Living Standard [KHL] as reference but consider also capability of labor-intensive companies, not just capital intensive companies. Sofjan said that today there were too many labor unions which were more than 100 in number, so it was extremely difficult to negotiate with workers especially with labor unions of small magnitude but highly vocal and loud voiced.

Sofjan asked the Government not to decide level of minimum wages by political pressure of workers next year. He disclosed the Indonesian Confederation of Labor Unions [KSPI] demanded increase of UMP by 50% in 2014. The workers reasoned that the average level of Minimum Wages [UMP] in Indonesia was by far lower than that of the neighboring countries like Thailand and the Philippines. Other reason that workers demand salary increase for 2014 was inflation and impact of oil price increase. Inflation caused by increase of certain essential need had lowered workers’ purchasing power.

Sofjan persisted that the mechanism of salary increase be synchronized with inflation. The percentage of wages increase depended on tripartite meeting between business people, laborers, and the Board of Remuneration. The mechanism which was aimed at win-win solution was designed to keep foreign investors from walking away. He reckoned that the salary increase to Rp 3.7 million would remain to be a discourse. He mentioned that increase of salary was only voiced by leader of the labor union.

Furthermore Sofjan reminded that increase of UMP in Jakarta by 2013 became Rp 2.2 million had troubled companies so many companies requested for postponement. The number of companies who requested postponement of UMP 2013 came to 498 companies, while in 2012 only 40 companies. “It must not happen that the Government’s decision to fulfill workers demand turn to be a boomerang” Sofjan concluded.

Business News - September 13, 2013

No comments: