Regional Governments Must Use Waging Regulation

Jakarta (Antara Bali) - Manpower Minister M Hanif Dhakiri has urged provincial and district/municipality governments to use Government Regulation (PP) No. 78/2015 on Waging System in deciding their regional minimum wages for workers.

"The PP on waging system is not a choice but a must for all regional governments to apply it in their respective regions," the manpower minister said.

Dhakiri made the remarks after attending a working meeting of the Civil Society Alliance for Great Indonesia (Almisbat) here on Tuesday.

He said he had received reports that the rates of wage based on the PP in a number of regions were higher than the rates fixed not using the government regulation.

Dhakiri said based on the reports, some provinces had fixed their worker minimum wages for 2016 based on the PP and the results showed the wage rates were higher.

"There was a region which set its minimum wage not using the PP formula, and it showed that the rate of its minimum wage only increased by seven percent. If it used the PP, the minimum wage for 2016 would increase by 11 percent. This could be higher if it used a clear formula, namely based on the increase of inflation and economic growth," he said.

A number of provinces have set their Regional Minimum Wage (UMP) rates for 2016. Three of them set their worker minimum wage rates lower than the PP No. 78/2015.

The three provinces were East Kalimantan (wage rate increases only by 6.7 percent), Central Kalimantan (8.5 percent) and Southeast Sulawesi (9 percent).

Minister Dakhiri has also said earlier that the waging system as regulated in the PP 78/2015 would also increase employment opportunities and reduce unemployment problems.

"Our workforce supplies are bigger than the available job opportunities so that we need to enhance employment through certainty in the waging system which will ensure the creation of more jobs," he said. (WDY)