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Ada Pertanyaan? Hubungi Kami Marcell Sihombing, Ady TD Achmad
Lawmaker Rieke Dyah Pitaloka (right). Photo by: SGP
The ongoing debate on raising minimum wage across Indonesia continues to the next stage. The last development came into the highlight when President Joko Widodo issued the fourth economic policy package, where one of the agenda is to revise the procedures in determining minimum wage. This agenda is already in play where the government is in the process of deliberating a Draft Government Regulation on Wages (Draft Regulation).
Through the Draft Regulation, the government plans to formulate minimum wage using a combination of variables such as current wage with inflation and economic growth. However, lawmaker Rieke Diah Pitaloka (Commission IX) predicts that this formula will only bring a rough 10% wage raise.
Lawmaker Pitaloka asserted that such miniscule raise will only worsen workers welfare. The proposed formula, she explained disregard the current minimum wage determination method, which uses a market survey and the wage council (dewan pengupahan) recommendation.
“Minimum wage calculation formula that is decided only based on inflation and economic growth is a fatal mistake, since the approach is founded on predictive figures instead of worker’s actual purchasing power,” asserted Lawmaker Pitaloka on 16 October 2015.
She further asserted that economic growth is not a reliable indicator in calculating minimum wage, as it does not reflect worker’s purchasing power. Moreover, inflation rate that will be used in the proposed formula is the previous year inflation data, which is prone to inaccuracy as it is yet to include economic risk index and economic instability factors.
Economic instability itself is the main cause of skyrocketing prices and severe drops in rupiah exchange rate. In addition, the proposed formula is considered to be unfair since it disregard the living necessity standards of married workers. Based on these arguments, lawmaker Pitaloka asserted that the Draft Regulation is in contradiction with Law No. 13 of 2003 on Labor Affairs (Labor Law).
The first provision to be violated would be Article 88 (1) of the Labor Law, which ensures every worker’s right to obtain a salary that may support a humane and decent living. Second would be, Article 89 (3) that mandates governors to determine the minimum wage by considering provincial and regency/municipality wage council into account. Third is that the new formula violates Article 98 (1) of the Labor Law that establishes the wage council at provincial and regency/municipality levels.
In order to revise and rearrange the policy framework, Ms. Pitaloka suggested that the government cancel the Draft Regulation. She also demanded the government to revise several existing regulations such as Minister of Employment Regulation No. 13 of 2012 on Components and Fulfillment of Decent Living Needs, Minister of Employment Regulation No. 7 of 2013 on Minimum Wage, and Minister of Employment Regulation No. 49 of 2004 on Wage-Scale Structures.
On a separate occasion, the Minister of Employment M. Hanif Dakhiri asserted that the wage calculation formula launched alongside the fourth economic policy package represents government effort to improve the welfare of workers and the unemployed.
“The point is, the role of the government is comprehensive, not only on wage issues but also many other areas,” asserted Minister Dakhiri.
Minister Dakhiri firmly believed that the new calculation formula will ensure a stable annual increase in minimum wage for workers under a measurable sum. The government is also trying to reduce worker’s expenditure costs through various policies in the social sector such as education, social security, labor housing, transportation, and citizen entrepreneurship loan (KUR).
(hot/ds)
Marcell Sihombing, Ady TD Achmad
Lawmaker Rieke Dyah Pitaloka (right). Photo by: SGP
The ongoing debate on raising minimum wage across Indonesia continues to the next stage. The last development came into the highlight when President Joko Widodo issued the fourth economic policy package, where one of the agenda is to revise the procedures in determining minimum wage. This agenda is already in play where the government is in the process of deliberating a Draft Government Regulation on Wages (Draft Regulation).
Through the Draft Regulation, the government plans to formulate minimum wage using a combination of variables such as current wage with inflation and economic growth. However, lawmaker Rieke Diah Pitaloka (Commission IX) predicts that this formula will only bring a rough 10% wage raise.
Lawmaker Pitaloka asserted that such miniscule raise will only worsen workers welfare. The proposed formula, she explained disregard the current minimum wage determination method, which uses a market survey and the wage council (dewan pengupahan) recommendation.
“Minimum wage calculation formula that is decided only based on inflation and economic growth is a fatal mistake, since the approach is founded on predictive figures instead of worker’s actual purchasing power,” asserted Lawmaker Pitaloka on 16 October 2015.
She further asserted that economic growth is not a reliable indicator in calculating minimum wage, as it does not reflect worker’s purchasing power. Moreover, inflation rate that will be used in the proposed formula is the previous year inflation data, which is prone to inaccuracy as it is yet to include economic risk index and economic instability factors.
Economic instability itself is the main cause of skyrocketing prices and severe drops in rupiah exchange rate. In addition, the proposed formula is considered to be unfair since it disregard the living necessity standards of married workers. Based on these arguments, lawmaker Pitaloka asserted that the Draft Regulation is in contradiction with Law No. 13 of 2003 on Labor Affairs (Labor Law).
The first provision to be violated would be Article 88 (1) of the Labor Law, which ensures every worker’s right to obtain a salary that may support a humane and decent living. Second would be, Article 89 (3) that mandates governors to determine the minimum wage by considering provincial and regency/municipality wage council into account. Third is that the new formula violates Article 98 (1) of the Labor Law that establishes the wage council at provincial and regency/municipality levels.
In order to revise and rearrange the policy framework, Ms. Pitaloka suggested that the government cancel the Draft Regulation. She also demanded the government to revise several existing regulations such as Minister of Employment Regulation No. 13 of 2012 on Components and Fulfillment of Decent Living Needs, Minister of Employment Regulation No. 7 of 2013 on Minimum Wage, and Minister of Employment Regulation No. 49 of 2004 on Wage-Scale Structures.
On a separate occasion, the Minister of Employment M. Hanif Dakhiri asserted that the wage calculation formula launched alongside the fourth economic policy package represents government effort to improve the welfare of workers and the unemployed.
“The point is, the role of the government is comprehensive, not only on wage issues but also many other areas,” asserted Minister Dakhiri.
Minister Dakhiri firmly believed that the new calculation formula will ensure a stable annual increase in minimum wage for workers under a measurable sum. The government is also trying to reduce worker’s expenditure costs through various policies in the social sector such as education, social security, labor housing, transportation, and citizen entrepreneurship loan (KUR).
(hot/ds)