Provincial Governments to Accelerate 2015 Minimum Wage

 
Christina Desy, Ady Thea DA
 
With the start of the new year, every provincial government must adjust its minimum wage level (Upah Minimum Provinsi - UMP), as mandated under the Minister of Manpower and Transmigration Regulation No. 7 of 2013on Minimum Wages. For some regions, such as Yogyakarta, while in substance the same, the term used differs and is referred to as th minimum regency/municipality wages (Upah Minimum Kabupaten/Kota – UMK) as determined by relevant area’s regent/mayor.
 
With only two months remaining, however, many provinces are yet to determine their 2015 UMP. Currently, out of 34 provinces, there are only 19 provinces that have determined their 2015 UMP. Notably, the Jakarta capital is one region that is yet to determine its minimum wage, creating much concern for workers in the capital city. The new rates for the regions that have set their 2015 UMP are as follows.
 

Province	2015 UMP	Increase (%) from 2014
Aceh	1,900,000	8.57
Sumatera Barat	1,615,000	8.39
Jambi	1,710,000	13.83
Sumatera Selatan	1,974,346	8.15
Bangka Belitung	2,100,000	28.05
Bengkulu	1,500,000	11.11
Banten	1,600,000	20.75
Bali	1,621,172	5.09
NTB	1,330,000	9.92
Kalsel	1,870,000	15.43
Kalteng	1,896,367	10.00
Kaltim	2,026,126	7.41
Gorontalo	1,600,000	20.75
Sulut	2,150,000	13.16
Sultra	1,652,000	18.00
Sulteng	1,500,000	20.00
Sulsel	2,000,000	11.11
Sulbar	1,655,500	18.25
Maluku	1,650,000	16.61

 
Problems in setting the minimum wage usually derive from different points of view between employers and employees, particularly in determining the decent living needs index (Kebutuhan Hidup Layak – KHL) that is used to determine UMP. In general, KHL is comprised of components representing employees’ needs for food, clothing, housing, health, education, and transport.
 
Jakarta’s Wage Council (Dewan Pengupahan), for example, is still discussing the 2014 KHL that will be the basis for determining its 2015 UMP. A market survey was undertaken from August to October this year resulting in the number IDR 2,448,082 for Jakarta’s KHL in 2014, but this survey resulte was rejected by the Worker Union members of Jakarta’s Wage Council.
 
Dedi Hartono, who represents the Worker Unions on the Jakarta Wage Council, objected that the survey process was invalid because there were no Statistics Bureau representatives or academics involved. In addition, the survey was conducted without specifying the surveyed KHL components first.
 
As a result, Mr. Hartono is suggesting recalculation of eight components under the 2014 KHL, covering costs for house rent, transport, drinking water, carbohydrates, coffee and meat, as well as the cost of education and recreation. Mr. Hartono elaborated that his calculations for the 2014 KHL indicate is should be IDR 2,737,000, if the calculation is done properly.
 
In response to Mr. Hartono’s assertions, Asrial Chaniago, the member of Jakarta’s Wage Council representing employers, stated that the employers have no objection to adjusting certain components of the 2014 KHL considering recent changes to living costs. Detergent packaging, for instance, has been reduced by 10% from 1 kilogram to 900 grams.
 
However, the employer faction definitely has a problem with increasing the 2014 KHL up to the number suggested by Mr. Hartono. With a difference of IDR 200,000, Mr. Chaniago indicated that employers would prefer to stick with the survey’s result.
 
Pressed by the end of year deadline, M. Hanif Dhakiri, Minister of Manpower, has instructed the heads of regional governments to accelerate their 2015 UMP determination process. In line with this instruction, Mr. Dhakiri has ordered his Ministry to appoint a team to assist in providing consultation and mediation services for Wage Councils.
 
(hot/kc)