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A lot of homework for Indonesia to improve welfare of workers
Jakarta Globe - May 2, 2017
Said Iqbal, chairman of the Confederation of Indonesian Workers' Union (KSPI), criticized the current regulation on minimum wage for Indonesian workers, best known as the PP 78, for keeping wage increases at a minimum.
According to him, the minimum wage for workers in Indonesia had only increased by Rp 130,000 ($10) to Rp 260,000 in 2017.
He pointed out that at $176, the minimum monthly wage for Indonesian workers is still lower than in many Asean countries, including in Vietnam, where the minimum wage is $182, and Thailand, where it is more than double at $357.
In a discussion last Friday, KSPI deputy president M. Rusdi said it is high time for President Joko "Jokowi" Widodo to scrap low wages for workers and do them justice.
The gap between the rich and the poor in Indonesia is already very wide, the president should not let it grow even bigger, Rusdi said.
"Our workers earn far less than their colleagues in Singapore, the Philippines and Thailand. We even earn less than workers in Vietnam. Increasing the minimum wage is the biggest homework for the government," Rusdi said.
Competitive labor force
A lecturer in labor politics from the University of Indonesia, Irwansyah, said the common perception that Indonesia has to keep the wages of its workers low to remain competitive in the labor market is misguided and should be rejected.
The Ph.D. candidate at the Asia Research Center in Murdoch University, Australia, explained that competitiveness in the labor market is not necessarily the result of being able to offer cheap labor.
Irwansyah said competitiveness should be more critically assessed in terms of productivity. A recent study shows that better wages is actually the number one factor to ensure productivity, he added.
But Indonesian companies, according to Irwansyah, are loath to raise wages for their workers for fear that the extra expense will cut back their profits.
Irwansyah said that President Joko "Jokowi" Widodo's administration has been content to keep wages low. The PP 78 that it issued last year was aimed at preventing local labor unions from putting pressure on local administrations to raise the minimum wage.
"The national law used to say [minimum wage] should be decided at the local level by three powers: the local administration, employers association and trade union. But PP78 replaced that system with a formulation of wage increases which prevents the union from having any say," Irwansyah said.
"We also have the unique problem of having fewer than 10 percent of our workers joining the union, which means that to get decent wages they still depend on their employers' goodwill," he added.
Workers need new skills and education
Meanwhile, Muhaimin Iskandar, the chairman the National Awakening Party's (PKB) central leadership board, said limited skills and low level of education are still hampering the workers' effort to improve their livelihood.
Muhaimin said the government and labor unions should take the responsibility to improve the workers' skills and education, with the government taking the lead.
"We're optimistic Jokowi can do it. And we at PKB are ready to help, including by creating job opportunities," Muhaimin said in Jakarta on Sunday.
According to Muhaimin, the government should implement pro-poor and pro-growth policies to assure investors that Indonesia's labor force are of high quality.
Out of a workforce of nearly 120 million people in Indonesia – according to Central Statistics Agency's November 2016 data – 40.65 percent have only passed elementary school, 18.14 percent have passed junior high school and only 17.45 percent have passed senior high school.
"We're 72nd in the global human capital ranking, and number six in Asean. If we're not careful, Cambodia, Laos and Myanmar will soon overtake us," he said.
Source: http://jakartaglobe.id/news/lot-homework-indonesia-improve-welfare-workers/.
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