- POSTED: 02 Jul 2014 22:33
- UPDATED: 02 Jul 2014 22:58
Indonesia's labour unions have gotten into the fray of the presidential elections -- they are pressing for salary hikes in exchange for workers' support for the presidential candidates.
JAKARTA: Indonesia's labour unions have gotten into the fray of the presidential elections -- they are pressing for salary hikes in exchange for workers' support for the presidential candidates.
Not only do their sizeable numbers make them an important support base for candidates, observers said tackling labour issues would be a key task for next president if the government wants to create more jobs for Indonesians.
Some union workers have thrown their support behind Prabowo Subianto as Indonesia's next president -- in return for their backing, Mr Prabowo has signed a 10-point agreement with their six million member-strong confederation that includes an increase in minimum wage.
Muhammad Rusdi, the Secretary-General for the Confederation of Indonesian Trade Unions, said: "The first is salary -- if wages increase, our purchasing power will also rise. We estimate that it will be between 20 per cent and 35 per cent."
Mr Prabowo's rival Joko Widodo has been credited for 2013's hefty wage hike in Jakarta when he was governor. Now running for the presidency, Mr Widodo is popular with unions and has also received backing from several of them.
However, he has not made them any promises -- except dialogue.
The setting of the annual minimum wage has been long been a contentious issue among workers and employers in Indonesia.
The World Bank in one of its policy recommendations has highlighted the need to re-examine Indonesia's rigid labour law -- it mandates that companies pay high severance packages, making it difficult for firms to fire workers.
However, union leaders said they are agreeable to having a new law in place.
Razian Agus Toniman, vice chairman of the Confederation of Indonesian Trade Unions, said: "For workers, it's not just revision, but to have a new labour law. The workers' position must be clear on the remuneration mechanism.
"If for instance employers feel the severance package is too high, then we must see its links to the guarantee of a pension."
Observers said tackling the labour issue should be a top priority for the next administration if it hopes to create more jobs for Indonesians.
Lin Che Wei, founder of Independent Research and Advisory Indonesia, said: "When people cannot fire, they are also reluctant to hire. So this labour law, which in theory aims to protect the labourer, counter-intuitively becomes not conducive for investors to set up factories or companies in Indonesia."
Militant labour unions were a thorn in the Yudhoyono administration in the last 10 years. And it does not look like the next president -- whoever he might be -- will have an easier ride in the next five years.