4 February, 2016Speaking at a joint press conference in Jakarta today, ITUC and IndustriALL general secretaries Sharan Burrow and Jyrki Raina urged the Indonesian government to return to the bargaining table with unions to increase the minimum wage .
The visit of the two global union leaders followed the Indonesian government regulation No.78/2015 on Wage Determination signed in October 2015, which effectively denies workers a collective voice in the annual wage negotiation process. The regulation limits minimum wage increases to an accumulation of the annual inflation rate and GDP growth figure.
Trade unions opposed the decision, with strong support from the International Trade Union Confederation (ITUC) and IndustriALL Global Union. Police used tear gas, water cannons and beatings to stop protests in October-November last year.
Addressing the press conference on 4 February in Jakarta, Sharan Burrow, ITUC general secretary, said she was shocked and disappointed at the government’s decision to sideline the unions from a democratic process and to instead impose a unilateral decision.
“We urge the Indonesian government to reconsider and bring back trade unions into the minimum wage setting process. Without decent living conditions for workers, and wages on which people can live with dignity, economies will not grow."
Jyrki Raina, general secretary of IndustriALL Global Union, stressed that the current minimum wage ranging from US$ 103 to 224 per month was too low to cover the basic needs of workers and their families. Inequality is increasing, which could lead to more social unrest.
“A living wage is a win-win solution both for the workers and their families, and for the economy through increased purchasing power, economic growth and the creation of new jobs.”
KSPI president Said Iqbal and KSBSI general secretary Eduard Marpaung added that the GINI coefficient measuring inequality has risen from 0.30 in 2000 to 0.41 in 2015. This shows that the fruits of economic growth have been unevenly distributed for the benefit of the wealthy.
At ITUC’s minimum wage forum held the same day in Jakarta, Indonesian workers testified of their hardship and pledged to do whatever it takes to win a decent life for their families. As much as 75 per cent of the workforce toils on a minimum wage.
Unions in Indonesia say that wage councils have been crucial for building economic and political citizenship at the local level. They have provided one of few places where workers can meet with employers and the government, and where their needs are addressed through an institutionalized mechanism. Replacing the councils with bureaucratic procedures preventing meaningful participation will destroy that, leaving unions with no choice but to resort to mass actions.
IndustriALL and ITUC have declared their support for the union demands, urging the government to:
- Withdraw the government regulation on minimum wage no 78/2015, which is in opposition to labour law no 13/2003, act no 88 & 89
- Include 84 items instead of 60 in the decent living cost standard
- Increase the minimum wage by 2.6 per cent and all wages for 2016 by IDR 500.000 (US$ 36)