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Wednesday, 21 November 2012

[wanita-muslimah] With Jakarta’s Minimum Wage to Rise 44%, Bosses Warn of Job Cuts

 

Ref: Apakah  jempol yang ditonjolkan oleh para buruh pada gambar dari artikel bermaksud mereka menyatakan setuju dengan 44% pemecatan buruh?
 
 

With Jakarta's Minimum Wage to Rise 44%, Bosses Warn of Job Cuts
Lenny Tristia Tambun,SP/Fuska Sani & SP/ Mikael Niman | November 21, 2012

The Jakarta Wage Council chose to raise the monthly minimum wage to Rp 2.2 million on Wednesday. (AFP Photo/Adek Berry) The Jakarta Wage Council chose to raise the monthly minimum wage to Rp 2.2 million on Wednesday. (AFP Photo/Adek Berry)
 
 
A 44 percent rise in the Jakarta minimum wage has prompted a major employer organization to warn of mass layoffs as companies grapple with the increased production costs, and led analysts to suggest that a major increase in productivity was needed to justify the hike.

Employer groups have also expressed fears that the new Jakarta minimum wage of Rp 2.2 million ($228) a month, approved by Governor Joko Widodo on Tuesday, would prompt similar pushes for wage increases across the country.

Business said that Joko's decision was driven by populism, and was an effort to show that he could meet the high public expectations before he took office last month.

Joko urged workers and employers to accept the Rp 2.2 million figure, and expressed hope that his decision would end a festering dispute between the two camps.

"If we talk about whether we are satisfied or not, then it will be an endless discussion, and we will never be able to decide on the figure," he added. "I hope all parties can accept it."

The Indonesian Employers Association (Apindo) voiced its opposition, saying that the increase was too great.

Under previous regulations, Jakarta's workers earned a minimum Rp 1.5 million a month. The new minimum wage is Rp 220,000 more than the amount sought by Apindo, but Rp 590,000 less than the amount sought by labor unions.

"We can't accept it as it is too high," said Hasanudin Rahman, the head of Apindo's industrial relations division. "Remember, Jakarta's wage [level] is the barometer for other regions. What if all other regions demand the same pay?"

Less than two hours after Joko's announcement, Yogyakarta Governor Sultan Hamengkubuwono X said the minimum monthly wage for his province for 2013 should rise above the cost of living.

"The minimum monthly wage in the entire territory of Yogyakarta should be higher," the sultan said.

"The decision on the minimum monthly wage level should be, at the latest, made today."

Previously, the Bekasi Wage Council raised the West Java city's minimum wage to Rp 2.1 million per month, a 50 percent increase from last year's Rp 1.4 million.

Apindo chairman Sofjan Wanandi said the wage increase would force the employers to lay off staff to cut costs.

"The government forgets that by making a populist decision, employers will suffer losses," he said. "The consequence? The employers will massively cut back employment."

Jakarta's manufacturing industry employs more than 3 million workers in factories, making shoes, clothes and other household goods, Sofjan said.

The textile and garment industry alone employs 2.5 million people while shoe manufacturers have hired 500,000 workers, he said.

"Take pity on [small business owners], the shoe and garment industry [and] all labor-intensive [industries]," he said. "They cannot afford this wage hike. Salaries are already 30 percent of costs. With the electricity and gas price hikes, how can we compete next year?"

Kodrat Wibowo, an economist from Padjajaran University in Bandung, said workers' demands for higher wages should match an increase in productivity, given Indonesian productivity lags behind that in neighboring countries.

International Labor Organization data from 2010 shows that Indonesia's labor productivity — measured in annual gross domestic product per working person — was $10,587, compared to $25,058 in Malaysia and $12,593 in China.

"Indonesian labor productivity is lower than others in the region. I don't think that is because of a lack of education or lack of training. That issue has been here for decades," Kodrat said, blaming the low productivity on "poor work ethics."

Enny Sri Hartati, director at the Institute for Development of Economics and Finance (Indef), proposed that the government boost infrastructure so that the costs of doing business could fall.

Economist Purbaya Yudhi Sadewa agreed that Jakarta's wage increase would be followed by other regions and that we will see massive layoffs across the nation to cut costs, or companies will not be able to compete and close their doors.

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