Indonesia to review minimum wage rules after fuel hike protests Reuters

Indonesia to review minimum wage rules after fuel hike protests Reuters

© Reuters. FILE PHOTO: University students protest against the government’s recent decision to increase fuel prices, near the palace in Bogor, Indonesia September 7, 2022. REUTERS/Ajeng Dinar Ulfiana/File Photo

JAKARTA (Reuters) – Indonesia will review the minimum wage and other labor rules, the president’s office said on Tuesday, after unions staged nationwide protests against recent gasoline price hikes they say came even as incomes stagnate.

President Joko Widodo raised subsidized fuel prices in Southeast Asia’s biggest economy by 30% earlier this month to curb a growing energy subsidy budget, sparking protests by workers and students across the country.

Rising fuel prices should accelerate inflation, which has already reached its highest level since 2015 due to rising food prices.

Heru Budi Hartono, chief of the president’s office, met with protesting workers at the presidential palace in central Jakarta on Monday to discuss their demands, according to a statement from the palace.

Workers have called for changes to the formula the government uses to determine annual minimum wage increases, as well as changes to the controversial job creation law, Heru said in a statement, citing a controversial law passed in 2020 that unions say is too much for – business.

Authorities will consider the workers’ demands on Tuesday, Heru said.

With growth and inflation still lagging behind the pandemic in 2021, the minimum wage rose by an average of just 1.09 percent in 2022 across the country of 270 million people, media reported.

Hermanto Ahmad, general secretary of the KSPSI union, was quoted in a palace statement as saying that the increase in fuel prices would have an impact on the prices of other necessities.

KSPSI did not respond to Reuters’ request for comment.

Another labor group that organized the rallies, KSPI, will continue to protest until the government reverses the fuel price hike, its chairman Said Iqbal told Reuters on Tuesday.

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