Unions may continue protests over wage hikes

PHOTO: Unions may continue protests over wage hikes

Some labour unions in Indonesia have vowed to hold more demonstrations after the authorities - worried about businesses leaving the country - offered hikes in the minimum wage that fell far short of demand.

Jakarta governor Joko Widodo has signed off on a new monthly minimum wage of 2.4 million rupiah (S$270) for 2014, an 11 per cent annual rise that is far below the 50 per cent hike or 3.7 million rupiah per month the unions demand.

Governors across Indonesia made similar wage increases over the weekend, with the highest rise of 38 per cent struck in the industrial city of Bekasi on the outskirts of Jakarta.

"We are disappointed with the dismal wage increase. Jakarta sets the tone on how much other provinces will increase their wages, so we feel Pak Jokowi (Mr Widodo) has copped out and sided with the businessmen and not with the workers and people," said Mr Said Iqbal, leader of one of Indonesia's largest union groups, KSPI, which led last week's national strikes.

He and other unions lowered their demands by 30 per cent, to about 3 million rupiah monthly. Smaller unions are still going ahead with smaller demonstrations till tomorrow, even as KSPI considers another national strike.

However, leaders of other large union groups either stayed out of last week's national strike or refrained from calling for steep hikes, aware that their bargaining power has been crimped by the weaker global economic outlook.

Initially, South-east Asia's largest economy was projected to grow 6.5 per cent this year, but analysts and lenders like the World Bank cut their forecast to below 6 per cent after the country raised subsidised fuel prices for the first time in five years.

Wednesday's release of third- quarter GDP figures confirmed this declining trend - growth was 5.6 per cent, the slowest pace in four years, according to the Central Statistics Agency.

The fuel price hike also caused inflation to peak at 8.8 per cent in August, the quickest rise in four years, further eating into workers' pay.

"We still think there is room for negotiations. For us, a large- scale strike is the last resort," Mr Andi Gani Nena Wea, leader of another large confederation, KSPSI, told The Straits Times.

He and Mr Mudhofir Khamid of the KSBSI confederation have broken ranks with Mr Said Iqbal's confederation after failing to agree on wage demands.

"Our priority this year is to save jobs while calling for a moderate wage hike," said Mr Mudhofir, whose union wants a 20 per cent wage increase.

Last week, thousands of workers nationwide walked off their jobs, causing "billions of rupiah" in losses for some 3,000 companies, said the chairman of the Indonesian Employers Association, Mr Sofyan Wanandi.

"How do employers justify high wage increases if workers' productivity cannot rise by that much?" he asked, adding that nearly 40 companies have sought a waiver from paying the minimum wage next year.

Mr Widodo, now jeered at after being cheered last year by workers for increasing their pay by 45 per cent, said flatly: "Last year, I allowed a steep hike for wages to catch up on cost of living but this gap has closed. Large increases cannot happen yearly."

His provincial government has prepared social welfare subsidies for the poor to help buffer rising costs.

The workers are not getting much sympathy from the Indonesian media, some of which have labelled their demands "excessive".

"Surely, we don't want labour unions to use demonstrations as a tool for extortion," said an editorial in the current affairs magazine Tempo.


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