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Four provinces defy government over minimum wage

Jakarta Post - November 28, 2016

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Anton Hermansyah, Jakarta – The Manpower Ministry said on Monday that four of the 34 provincial administrations had disregarded a government instruction to increase their respective 2017 provincial minimum wages (UMP) by 8.25 percent, citing high inflation and low productivity levels.

The ministry previously announced that the minimum wage increase for 2017 had been pegged after taking into consideration the basic macroeconomic assumptions for next year, like the level of inflation and economic growth. All provincial administrations notified the government of the final minimum wage level for their respective regions earlier this month.

Speaking in a press conference, the ministry's director general for industrial relations and social security, Haiyani Rumondang, said three provinces – Aceh, South Kalimantan and Papua – had increased their minimum wages by 18.01 percent, 8.29 percent and 9.39 percent, respectively, due to high inflation levels. The East Nusa Tenggara (NTT) provincial administration, meanwhile, decided to raise its UMP by only 7.02 percent, citing low levels of productivity.

"We will report this to the Home Ministry, which will decide on the sanctions to give the provinces," Haiyani said.

"Of the 34 provinces, 30 provinces or 88.23 percent followed the rule, compared to only 41.17 percent last year, so this year's percentage is huge progress," she said on Monday.

Last month, workers across the country staged protests demanding local administrations increase their wages by up to 25 percent next year.

For 2017, Jakarta's UMP still tops the list at Rp 3.36 million (US$248.60) per month, followed by Papua and North Sulawesi, with Rp 2.66 million and Rp 2.6 million, respectively. Yogyakarta, meanwhile, has the lowest minimum wage of Rp 1.34 million per month. (hwa)

Source: http://www.thejakartapost.com/news/2016/11/28/four-provinces-defy-government-over-minimum-wage.html.