break the cycle: how corruption starts

The Yogyakarta governor has set the 2010 minimum wage for workers at Rp 745,694 per month... [which is] 90 percent of the average fair living cost for people in the province.

Is this decision so dodgy that it should be investigated by the KPK? Why would the governor set the minimum wage so low? Is he just stupid, or is someone else pulling the (purse) strings?

It's probably neither. My guess is that the governor has his eyes on the budget, and whether he can afford and the impact of increasing locally government wages.

The problem is, if government employees are not paid enough money, they will look elsewhere. This is how corruption starts.

Minister Sri Mulyani understands this. She replacing the Finance Ministry's ridiculous rank-based pay system, with a performance-based pay system. The better you do, the more money you make.

We must break the cycle.

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Filed under  //   corruption   minimum wage  

Comments (5)

Nov 08, 2009
Pandu Gunawan said...
hi brett, the minimum wage for workers (or Upah Minimum Provinsi - UMP in Bahasa term) does not apply to government employees (PNS).. it only applies to workers in private sectors such as factory etc. The PNS salary is determined by the state in the budget law... in 2009 the lowest salary of a PNS is Rp 1.721.000. not much still....
Nov 09, 2009
Brett McGuire said...
Hi Pandu -- thanks for explaining that. Do you have any insight into why the governor set the minimum wage so low? 
Nov 09, 2009
Pandu Gunawan said...
the minimum wage is determined by the governor and the local parliament. the output is in the form of Regional government regulation (Perda). the minimum wage is determined by taking into account fair living cost in such province. so the minimum wage usually equal to the fair living cost. however as everyone know, the businessmen have some 'power' or 'voice' too in this process.. they have an interest to make it low so it will not burden them. so in this Jogja case, probably the businessmen have won :)
Nov 11, 2009
Hank McCoy said...
it must be hard to live w/ that salary isn't it??? I think Thats the primary reason why indonesian brought they ass out over the sea...so what should we/em do to stop this shit?over and out
Nov 11, 2009
Brett McGuire said...
You're probably right. I can't imagine how anyone can live on this salary. We need to raise salaries. We started this year by introducing minimum salaries in our firm -- for all levels of employment -- and by providing extra benefits to all staff earning below Rp 5 million. 

The one that I am most proud of is education. Any employee earning less than 5 million gets all their kids education costs covered, including fees, books and equipment, clothing... So far there is no limit, and one of our employees' daughters is studying law, supported by the firm. 

We also provide 100% financial support for employees who want to undertake extra study, so long as it is in the interests of both the employee and the company. At last count we have 8 staff studying law (half of them are secretaries).

All this costs remarkably little, but has transformed the firm. 

Sorry for bragging :) 

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A hyper-opinionated bule with a deep fondness for Indonesia. Mildly outraged but mostly harmless.

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