Minimum Wage Increases, Labor Productivity Remains Low
3 April 2014 18:24 WIB
TEMPO.CO, Jakarta - Hariyadi Sukamdani, Deputy Chief for Public, Fiscal, and Monetary Policies at the Indonesian Chamber of Commerce and Industry (Kadin), said that the minimum wage for laborers in Indonesia is too high and not equitable with laborers' productivity.
"Compared to other countries in Asia, our minimum wage is higher but the productivity is lower," he said on Thursday, April 3, 2014.
Based on sample data gathered by USAid and Bappenas in the shoe manufacturing industry, which considered to absorb a large number of workers and has export potentials, an Indonesian worker can only produce an average of 0.8 pair of shoes a day. On the other hand, the amount of minimum wage in 2013 had increased to US$242 per month from US$176 per month in 2012.
Meanwhile in Vietnam, with a minimum wage of US$140 per month, a worker can make a pair of shoes each day. In China, with a minimum wage of US$235 per month, a worker can finish 1.1 pair of shoes per day.
Hariyadi further explained that business owners are still burdened with other costs, including social security, salary rise and severance payment.
"So, basically there is no cheap labor in Indonesia," he said.
PINGIT ARIA