West Java Minimum Wage Goes Local

Following policies found in East and Central Java, the West Java provincial government announced that it would decentralize minimum wage policy even further, so that they will be set at the regency and municipality level, rather than province wide.  In Indonesia, the minimum wage serves less as a floor for wages and more as a benchmark.  This, along with less widespread collective bargaining, makes minimum wage policy far more important to the Indonesian labor movement than, for example, the American labor movement.

As Patrick Quinn notes in his ILO report on labor representation in Indonesia from 1998-2003, the localization of minimum wage policy “has undoubtedly opened up the possibility for workers to launch local campaigns aimed at encouraging politicians to increase wage levels.”  I think an interesting comparative study is in there somewhere, to determine in what ways labor unions have gained leverage by the decentralization of the minimum wage, as well as it yearly determination.  And are there provinces where this process has hurt labor unions?  If anyone knows of any info or commentaries on the matter, feel free to post them or pass them along.


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