TEMPO.CO, Jakarta - A city must furnish its residents with decent wages. Yet demanding the minimum wage rate of Jakarta be increased to Rp3.79 million is just logically unacceptable. Amid the nation’s economic slowdown, this demand may have a boomerang effect on the city: dying industries and fleeing investors.
The minimum wage in Jakarta this year has reached Rp2.2 million, up by over 40 percent than last year’s. If the workers’ demands are met, it means their minimum wage will soar by 72 percent—too much for a nation whose economic growth had been forecast to decline.
The minimum wage for laborers has always been set based on the standard cost of living (KHL). The workers currently receive a salary above the KHL at Rp1.98 million, which was pegged based on the results of a survey last year. This year, according to the results of another survey in July, the capital’s KHL has slipped to Rp1.92 million. However, this figure is predicted to rise following increased prices of subsidized oil fuel.
The government uses 60 components to measure the KHL, ranging from the cost of home rents, transport, to the cost of deodorant and recreational activities. However, these workers, who remain unsatisfied, suggested at least 24 components be added to the existing components. They believe a home suitable for a blue-collar worker should comprises three rooms: a bedroom, kitchen and separate bathroom. They also demanded for a series of "lifestyle costs", such as cell phone credits and fans.
The workers’ demands for these additional components will obviously vex businessmen. Workers’ unions should have crafted their proposal realistically. For example, their demands should focus on the rocketing prices of basic necessities and transport due to increased prices of subsidized oil fuel. The KHL will still increase after the addition of these components, but nothing huge.
Random demands will also make investors think a thousand times before even thinking of investing in the nation. In the last few years, many investors have fled to China or Vietnam, where the minimum wages for workers were lower. In Indonesia, the minimum wage for workers in a shoe factory reaches US$1.03 per hour, while China sees $0.91 per hour and Vietnam sets the lowest at $0.46 per hour.
Indeed, the government must not sacrifice the future of the workers for the sake of investors. Rather, it has to be able to find the best "concoction": a reasonable minimum wage increase and means to make investors stay. The government can also boost its competitive edge by trimming the high economic costs. Another way the government can do to help the workers is provide low-cost apartments near factories and affordable public transport.
The Jakarta administration has actually attempted to ease the workers’ burden by providing free health care and educational aid for their children. The workers should have appreciated these efforts. The public will lack the sympathy for these workers if they continue their protests demanding an irrational raise . (*)
