Indonesian Workers Rally Against Social Security Law in Jakarta
Hundreds of Indonesian laborers rallied in Jakarta today to protest against having to pay for social security services, adding to demonstrations for higher wages.
Workers from Jakarta and surrounding cities gathered at the capital’s main traffic circle before heading to the Presidential Palace to protest a 2011 law that will set up social security bodies, Bambang Wirayoso, chairman of the National Workers Union, said during the demonstration. Under that law and the 2004 social security law, salaried workers must contribute a percentage of their pay that employers transfer to the social security bodies. Non-workers also must pay a fee to have access to the system.
“We’re not against social security,” Wirayoso said after a speech at the rally. “But don’t let social security, which is the government’s responsibility, become the people’s responsibility to pay for.”
Workers are demanding higher wages as economic expansion boosts the cost of living in Southeast Asia’s biggest economy. Inflation last month reached the highest in more than a year and gross domestic product growth exceeded 6 percent for an eighth quarter amid rising investment.
Domestic investment rose 33 percent and foreign direct investment gained 22 percent in the third quarter, according to government data.
Indonesia’s inflation accelerated to a 13-month high in October with consumer prices climbing 4.61 percent from a year earlier, the statistics office said Nov. 1.
Jakarta Governor Joko Widodo increased the 2013 provincial minimum wage by 44 percent to Rp 2.2 million ($229). In China, Shenzhen has the highest monthly minimum wage of 1,500 yuan ($241), while Beijing has the highest hourly minimum wage of 14 yuan, People’s Daily reported Oct. 26.
“Higher wages would narrow Indonesia’s labor cost advantage over Asian peers,” Helmi Arman, an economist at Citigroup Inc. wrote in a note today. “But the wage hikes should not overturn Indonesia’s positive FDI outlook.”