Indonesian employers group says proposed minimum wage rise is too high

Indonesia's provincial minimum wage would rise by 5.3% to 7.3% next year under a new government formula, an increase that businesses think is too high, an official at employers association APINDO said on Wednesday.

On Tuesday, the Ministry of Manpower outlined a wage formula that takes into account inflation, economic growth and the contribution of labour to economic growth.

The average provincial minimum wage rise this year was 6.5%, with the average monthly minimum wage at about 3.3 million rupiah ($198), ministry data showed.

"We consider that it's too high. Many companies couldn't even meet the minimum wage for this year," Bob Azam, APINDO's head of labour affairs, told Reuters.

Indonesia's Garment and Textile Association hopes localities hosting textile industries set wage increases at the lowest limit "so that we may have a chance at chasing local and international markets," Chairperson Anne Patricia Sutanto said on Wednesday.

Minister of Manpower Yassierli told reporters on Wednesday that the government had considered the conditions of businesses and workers equally.

"The spirit of the (formula) is the workers' welfare and the growth of the industries," he said, adding the central government had briefed regional leaders.

Provincial governors have until December 24 to set their region's wage increase for next year using the new formula.

The Labour Party, which represents unions, urged governors to set wage increases at the highest limit otherwise workers may stage demonstrations, Chairperson Said Iqbal said on Wednesday.

Workers had sought an increase of at least 6.5% given the rate of economic growth this year, Said had said.