Next year, City’s minimum wage to rise by 4.5 percent

Source: BERITAJAKARTA.COM — 10/30/2009 8:14:11 PM

http://www.beritajakarta.com/2008/en/newsview.aspx?idwil=0&id=12863

As part of its efforts to improve public welfare, Jakarta Capital City Government plans to increase its provincial minimum wage (UMP) by 4.5 percent to Rp 1,118,009 from Rp 1,069,865 last year. The new minimum wage will start to be implemented in January 2010.

The increase will be officially announced early November 2009. The increase is not the first; in 2007, the city administration raised the minimum wage by 10 percent, from Rp 819,100 in 2006 to Rp 900,560. And in the following years (2008 and 2009), the minimum wage rose by 8 percent to Rp 972,604 in 2008 and Rp 1,069,865 in 2009.

The 4.5 increase is calculated based on fair living needs (KHL) in Jakarta. Based on survey in 2007, the city’s KHL was recorded at Rp 1,055,000 per month. Therefore, by the new minimum wage set for 2010 (Rp 1,118,009 per month), it means that labors in Jakarta can enjoy a fair living.

Not only that, the increase also considers other factors such as components of public needs and the ability of employers.

In regard to the minimum wage increase, Jakarta Capital City Administration Secretary Muhayat says the decision has been approved in a meeting involving labor union, Jakarta employers association, and Jakarta government. “The increase is a final decision. It will be immediately endorsed by Jakarta Governor in a governor regulation, and to be implemented in January next year,” said Muhayat at City Hall, Jakarta, Friday (10/30).

Jakarta Capital City Department of Labor and Transmigration head Deded Sukendar says the minimum wage increase is also based on the prediction of inflation increase in Jakarta as well as the potential of economic growth. The improving condition of Jakarta’s economy in the wake of global economic crisis in 2008 is also among the considerations, he says.

Pertaining to the issue, head of Indonesian Employers Association (Apindo) of Jakarta chapter, Soeprayitno says, so far, there has been no complaint from employers concerning the increase, because the hike amount is still considered normal. Even, he predicts that the new wage will bring about a positive impact to investment climate in the Indonesian Capital City of Jakarta.