Demonstrations due to Unclarity about Jakarta's New Minimum Wage
In late 2012, the local Jakarta government decided to increase the monthly minimum wage to IDR 2.2 million (US $229), a 44 percent increase from the previous standard. This rigorous change was one of the first policy changes of the newly elected Joko Widodo administration. Joko Widodo (often referred to as Jokowi) enjoys huge popular support and, similar to Barrack Obama at the start of his reign, provides hope to Jakartans, who have high expectations of his administration.
Although Jakarta's new minimum wage is still a low amount and necessitates a simple life style, this 44 percent increase is understandably a big burden on the financial books of the employers or business owners. Within that framework, the city administration decided that businesses that cannot afford this rise in salaries can apply for a delay in implementation. Up to today, 941 companies requested for this delay and around 80 percent of those requests will be approved.
However, on Wednesday, hundreds of workers demonstrated in Central Jakarta because they had not received the new minimum payment. It is assumed that a number of companies refuse to pay the new standard even though they did not get the exemption (yet). In order to receive the exemption, a company needs to reach an agreement with its workers and needs to be audited by the local government. If companies do not comply with these guidelines, the case can be brought to the State Administrative Court. But given all the unclarity of the situation for the workers, demonstrations are likely to continue.
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