Jakarta (ANTARA News) – The implementation of a minimum wage standard for workers in the ASEAN region will improve the welfare of the workforce, especially those employed in the footwear industry, according to Indonesian Vice President Jusuf Kalla.
“There should be an agreement that none of us (ASEAN) will compete by lowering the minimum wage rate but will instead compete to achieve good productivity,” Kalla stated at the Vice Presidential Palace here, Friday.
Kalla remarked that the absence of a standard minimum wage for workers in ASEAN countries had led to disproportionate welfare in workers in ASEAN and those in other regions in addition to affecting the purchasing power and economy of the country.
The vice president pointed out that if a foreign investor came to Indonesia and inquired about the minimum wage standard, then he/she will opt for other countries, such as Vietnam and Cambodia that have adopted a lower standard.
“They came to Indonesia and sought details on the minimum labor wage standard. If we do not agree to them, then they will switch to Vietnam. Thus, Vietnam will continue to offer lesser minimum wages, and we (Indonesia) will be forced to reduce it,” Kalla explained.
The absence of a standard wage policy has led to a reduction in the income of the people, especially workers, due to competition among ASEAN countries.
At the World Economic Forum in Kuala Lumpur held earlier, Kalla had proposed the implementation of a minimum wage standard for workers in the ASEAN member countries to create equality in the region.
“It is important to ensure that there is no unfair competition in the ASEAN,” he stated on the sidelines of the World Economic Forum (World Economic Forum on ASEAN) in 2016 in Kuala Lumpur, Malaysia.
At the forum, Kalla pointed out that Indonesia had huge manpower resources.
“As a manufacturer of footwear and garments, we can compete, but they (investors) opted for Cambodia and Vietnam. They manufacture their products in our country at US$15 and sell them at $100 in other countries. This is not equality,” the vice president emphasized.
Kalla noted that ASEAN countries should not compel workers to compete and agree to work at a lower minimum wage, but they must be able to work together to raise the minimum wage standard to ensure healthy competition.
“It is not only to create an increasingly cheap labor base but rather also how to increase productivity and to boost the peoples purchasing power, so that the economy can grow,” Kalla added. 3 June 2016
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