Indef: Raising Minimum Wage in Jakarta Leads to Urbanization

TEMPO.CO, Jakarta - Enny Sri Hartati, director executive of the Institute for Development of Economics and Finance (Indef) said that the Jakarta administration must be careful in setting the minimum wage.

According to Enny, an extravagant minimum wage may cause urbanization issues.

“The governor-elect must not focused on raising the minimum wage,” Enny said in Jakarta yesterday.

Enny views that the provincial minimum wage is an economic safety net, instead of the proper wage standard. Enny explained that workers in Jakarta spend 30 percent of their incomes for transportation and 25 percent others for housings.

“Improving the transportation system and providing cheap housings are better solutions than raising the minimum wage.

In setting the minimum wage, Enny suggested that the Jakarta administration should facilitate a discussion between workers and business owners as mandated by Government Regulation No. 78/2015.

“The wage council must be reactivated,” Enny added.

The government, Enny said, muat also empower worker unions which play an important supervisory role in relation to regulation implementation.

“In other countries, a worker union has an equal position with a political party in passing a regulation,” Enny said.

Enny believes that both central and regional governments must focus on improving workers’ skills.

“Certifications for workers through trainings must be realized soon,” she said.

IRSYAN HASYIM | JOBPIE