11/24/2012, 00.00
INDONESIA
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Jakarta: entrepreneurs wage war against the governor who increased the minimum wage for workers

by Mathias Hariyadi
The new minimum wage - to go into force in 2013 - will be about 0, a more than 40% increase over the previous wage. Companies, supported by the central government, have announced they will challenge it in court; and the flight to areas where labor costs are lower.

Jakarta (AsiaNews) - The trade association of entrepreneurs in Jakarta, joined at the national level under the abreviation "Apindo", announced they will fight against the recent decision by the new governor Joko Widodo, who has arranged for a 44% increase in the minimum wage for workers. A move welcomed with joy and satisfaction by workers and social partner organizations, who for days have been in the streets requesting that salaries be adjusted to meet the cost of living, a move strongly opposed by manufacturers and small and medium size enterprises. The latter have been flanked by even the central government of President Susilo Bambang Yudhoyono, who has expressed solidarity with the businessmen and promised "support" for the appeals presented in court to invalidate the measure.

Thousands of underpaid and exploited workers have taken to the streets in recent days, asking for an increase in the minimum wage, paralyzing traffic and commercial activities. Their protest has been heard and accepted by "Jokowi" - the nickname of the new governor of the capital, a moderate Muslim and liberal - who has decided to set the threshold at 2.2 million Indonesian rupiahs (about 8). The measure will cover next year and will come into force in January 2013.

The previous JRU limit (Upah Minimum Regional, the minimum wage at the regional level) was 1.5 million rupees; the increase exceeds 40% and has sparked anger and discontent among entrepreneurs, industrialists and businessmen. Some see reduced earnings prospects, while others fear the closure of businesses as a result of soaring prices, or mass layoffs decided by entrepreneurs no longer able to bear the cost of labor. Many instead are thinking of moving to other parts of the archipelago, where the minimum wage controversy has not yet taken on confrontational tones and revenue prospects are far superior.

What is certain is that the governor, while on the one hand having satisfied workers, will now be forced to face the barrage of local entrepreneurs, who have already announced they will challenge the law in court and undertake a fierce legal battle. Noteworthy was the furious reaction of Sofjan Wanadi, the Apindo President, who spoke of a "bad day" for entrepreneurs and pointed the finger at Jokowi, the only one "responsible" for the consequences of the decision, especially for smaller firms, craft enterprises and small and medium-sized enterprises.

Meanwhile, the Industry Minister MS Hidayat expressed the government's support for the entrepreneurs. The Ministry and small and medium-sized enterprises have allegedly reached an agreement, according to which they would not have to apply the minimum wage law. The same should also go for the industry giants, which employ hundreds of workers. Widodo commented, "it is their [i.e., the companies'] right" to oppose the decree.

  

 

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