Bali sets minimum wage, workers stage protests

by Ni Komang Erviani on 2012-12-06

As the provincial administration set the 2013 minimum wage for the province at Rp 1,181,000 (US$123.02), a 20 percent increase from 2012, workers across the island staged protests against what they called an unfair decision.

Governor Made Mangku Pastika also expressed concern over the decision made by the provincial wage board. “The decision has been made and the provincial administration has no further authority to act,” Pastika said.

A week earlier, Pastika told journalists that he would do anything he could to review the decision and set the minimum wage at around Rp 2 million.

“Bali is a world tourist destination. Living expenses here are very high thanks to our robust tourist industry. But for workers conditions will be so difficult, especially when the minimum wage is too low,” Pastika said at that time, while postponing the signing of the board’s decision last week.

Pastika had promised to revise the minimum wage to that of Jakarta’s.

“Jakarta, as the capital city, has set its minimum wage at Rp 2 million. I really wanted to set the minimum wage for Bali at least near Jakarta’s rate. I am wondering how workers can survive with such a wage for housing, eating and other living expenses. They should not eat nasi jinggo [an inexpensive meal consisting of a small cup of rice mixed with a slice of boiled egg and shredded chicken] every day,” the governor said.

Unfortunately, Pastika’s efforts to revise the minimum wage were fruitless. The Medan administration in North Sumatra has set the city’s 2013 minimum wage at Rp 1.46 million ($152), 6 percent higher than North Sumatra’s minimum wage of Rp 1.37 million.

I Wayan Suasta, head of Bali Manpower and Transmigration Office, explained the calculation of the minimum wage was based on a compromise agreement between employers and the workers’ union with the provincial administration acting as mediator.

The workers’ union insisted on a 30 percent increase, while employers wanted only 10 percent. “The provincial administration proposed a 20 percent increase, the median amount of the two proposed wages,” Suasta said.

Suasta also said that not all employers have businesses related to tourism, such as hotels and restaurants. “The majority of employers are those operating small- and medium-enterprises [SMEs]. For those who have strong financial support, especially in tourism, they may increase their wages.”

The minimum wage was only the standard amount that had to be paid for any worker in the province, he added. “Employers who have a strong business foundation are required to give their workers higher wages.” In the richest regency, Badung, for instance, the administration has planned to set the minimum wage higher than the provincial wage, particularly for those working in tourism.

In a recent meeting involving several relevant parties, including the association of tourism workers (SP-Par), the Badung administration agreed to set its minimum wage for 2013 at Rp 1.4 million as compared to Rp 1.29 million in 2012.

According to the administration’s data, there are 3,045 companies operating in the regency, around 80 percent of which are working in tourist-related industries.

Meanwhile, Ichsan Tantowi, chairman of the Indonesian National Front for Workers (FNBI) stated that the minimum wage was too low. “We are facing possible rises in oil and electricity rates,” claimed Tantowi during a discussion at the office of the Indonesian Alliance of Independent Journalists (AJI) in Denpasar.

According to Tantowi, the minimum wage was not based on real life conditions. “Most workers live far from traditional markets which sell inexpensive goods. Most of us live on working sites,” he said.

The decision to set the low minimum wage was just an attempt to protect employers from going bankrupt. “The decision was made in favor of businessmen and employers, far from any intention to improve the living conditions of the workers,” Tantowi said, adding that ideally the province’s minimum wage would be Rp 1.4 million considering the high inflation rate, oil and electricity rate hikes.

Separately, Wayan Gde Suparta, an academic from Udayana University, explained that objections to the minimum wage were common.

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