They need not stage rallies any longer because they have received minimum wages."
Jakarta (ANTARA News) - A salary hike is one of the demands raised by workers at almost all rallies as many of them earn less than minimum wage.

With their salary falling short of the minimum wage, many workers particularly in major cities cannot afford the fair cost of living.

To improve workers welfare, the government announced a new wage policy which is part of the fourth economic policy package announced Thursday (Oct 16).

The new wage policy is one of the three policies to improve the welfare of workers. The other two policies deal with ways to improve social life and the development and supervision of social dialogs at bipartite forums within companies.

Under the new wage policy, the minimum wage will be increased every year at a measured rate.

The formula for the salary hike next year will be based on the monthly wage this year plus a percentage increase based on the rate of inflation and economic growth, Coordinating Minister for Economic Affairs Darmin Nasution said.

If this years inflation and economic growth rates are recorded at 5 percent respectively, next years minimum wages will be this years minimum wages plus 10 percent of this years minimum wages, he said, citing an example.

The new wage policy which is based on a simple formula is expected to prevent workers from falling prey to lower wages while at the same time allowing employers to have a sense of certainty.

Workers should no longer resort to staging rallies to demand salary hikes following the issuance of the new wage policy, Vice President Jusuf Kalla has stated.

"They need not stage rallies any longer because they have received minimum wages. Dont forget that the wages will be increased by a minimum of 10 percent every year," he said at his office here on Friday (Oct 16).

"We do not want employers and employees to have different views throughout the year. A clear regulation is needed to serve the interests of both employees and employers," he said.

The formula-based wage fixation policy is aimed at creating more jobs as it will help attract more investment, Manpower Minister M Hanif Dhakiri said.

The wage hike formula will induce certainty into the salary system, thereby improving the investment climate and creating new jobs for 7.4 million job seekers in the country, he said in a press statement released Friday (Oct 16).

"With more jobs being created, workers and job seekers will have many choices. If they have many choices, their position will become stronger and their welfare will improve. So the wage policy is indeed for the people, both workers and job seekers," he said.

The new wage fixing policy will not only provide protection to workers and job seekers but will also give a sense of certainty to the business world, he said.

The wage policy will also ensure an annual salary hike, he added.

"The wage fixing system as per a formula is a win-win solution. On the one hand, the workers will have certainty about an annual salary hike, while on the other hand, the employers will have certainty about the extent of the annual salary hike. Thus, it will not disrupt their financial planning," he said.

The minimum wage policy which adopts a formula system will act as a safety net to ensure that workers/laborers do not fall prey to low wages, he said.

"With this policy, workers will most likely see a salary hike every year at a measured rate," he said.

Through the social policy, the government will strive to reduce the cost of living for workers by issuing policies related to cheap education, social security, and low-cost housing, in addition to mass transportation modes and low interest smallholder business credits.

Workers welfare was not merely dependent upon their wages but also on the state backed social facilities which help in reducing the cost of living, he said.

The third policy deals with the development and supervision of bipartite dialogs between employers and employees, he said.

The bipartite social dialog is the key to improving workers welfare by applying a wage structure and deciding a scale as per which their wages are calculated, taking into account the period of work, post/class, and education, apart from competency, achievement and productivity.

However, Secretary General of the Confederation of Indonesian Labor Unions (KSPI) Muhammad Rusdi has said that the new wage policy which is part of the fourth economic policy package will only benefit employers.

"The wage policy will only benefit employers and does not accommodate workers aspirations. Despite a salary hike based on inflation and economic growth, Indonesian workers will remain poor although they are employed," he said at a press conference here Friday.

It is likely that only Indonesian workers who have been employed will remain poor because they receive low salaries. In fact, in other countries, unemployed people receive allowances so that they can lead a fair life.

"For workers and other people, wages are the main artery. The government has sided with the employers ever since the first, second and third economic policy packages were issued. We highly expected the fourth economic policy package to side with the workers," he said.

Reporter: Suharto
Editor: Priyambodo RH
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