Union workers from Serikat Pekerja Seluruh Indonesia walk during a protest in the business district in Jakarta yesterday.
JAKARTA: Thousands of Indonesian workers took to the streets of the capital yesterday, demanding the government raise wages and adding to fears that labour costs in Southeast Asia’s biggest economy are becoming non-competitive.
About 7,000 members of the country’s largest labour unions marched through the centre of Jakarta to the presidential palace to press their case for a 50 percent increase in the minimum wages and improved social welfare.
The demands add to pressure on President Susilo Bambang Yudhoyono to improve the lot of low income workers ahead of next year’s parliamentary and presidential elections.
His government has said it would announce an inflation-linked basket to set minimum wages but manufacturers worry that rising costs are already threatening to make Indonesian products less competitive.
The government-set minimum wage rose 44 percent last year in greater Jakarta, where the bulk of the country’s factories are based. The minimum wage in greater Jakarta is on average 1.9m rupiah ($172) a month.
“For sure, some investors are worried that the government will give in like they did last year,” Sofjan Wanandi, head of the Employers’ Association of Indonesia said.
A presidential spokesman declined to comment when asked how the government intended to respond to the latest demands.
Union leaders said they planned more protests in the next few weeks, including a national strike in late October.