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workers to be heard can reduce the incidence of illegal or wildcat strikes. What would be needed, however, would be more than legislative changes. In order to move to a mutually beneficial industrial relations system, appropriate and responsible changes in behavior from employers and workers in addition to government are called for. Careful changes in legislation, industrial relations practice and increased deregulation and competition in product markets could improve the positive role that unions can play while controlling the "negative" role.

# B. **Minimum Wages**

The Indonesian Government responded to the greater international scrutiny of labor standards in the late eighties by focusing particularly on minimum wage legislation. In 1989 it revised the existing system of minimum wages which had been introduced in most regions from the early seventies. Minimum wages are currently regulated through Ministry of Manpower Regulation No. PER05/MEN/1989 (amended in 1989 and 1990). The minimum wage refers to a lowest basic wage/salary plus permanent allowances where the basic wage/salary must be 75% of the minimum wage. Minimum wages are to be fixed based on considerations of "minimum physical need", costs of living and labor market conditions. There is no national minimum wage but regional minimum wages (established separately by sectors and sub-sectors) are fixed through Decisions of the Minister of Manpower. The 1989 regulation states that minimum wages must be reviewed at least every two years. A 1990 decree requires that the minimum wage be adjusted once a year in proportion to the CPI. Regional wage surveying boards3l/ propose regional (sectoral and sub-sectoral) minimum wages which have to be approved in stages by the Governors/Heads of Local Government and the Minister of Manpower. A National Wage Surveying Board provides technical guidance to regional boards.

Ministerial decrees announcing new minimum wages clarify further that the minimum wage constitutes money received in cash, excluding benefits of an incentive nature. They also state that sectoral minimum wages also apply to workers paid per contract/ unit/piece, to workers on probation, women workers, and apprentices. Minimum wages are established with a standard 7 hour workday and 40 hour workweek and are announced daily wages. Legislation introduced in 1990 requires that increases in the minimum wage be proportional to increases in the CPI. While in 1994, minimum wage decisions for different regions came out in three groups at three different times in the year, the Manpower Ministry plans to regularize this further, announcing new minimum wages once a year for all regions. The gap between minimum wages and minimum physical needs has been closing and the Manpower Ministry expects that in 1995, the average minimum wage will be above average minimum physical needs. As discussed earlier, failure to pay the minimum wage (and more recently demands for increases in minimum wages) has been the major cause of strikes in the past couple of years.

under the Pinochet regime, earlier legislation in Korea, current legislation for independent plant level unions, and decades ago in the U.S..) Yet, since collective bargaining at the plant or enterprise level can be important for the flow of information, for example relating to specific working conditions, between workers and managers at a decentralized level, it should be actively encouraged by the law.

31 /This are quadripartite bodies consisting of representatives from labor, management, government, and universities. They also establish basic-needs figures (Minimum Physical Needs or "KFM") for each province which refer to monetary amounts considered sufficien **t** o enable a single worker or families of various sizes to meet the basic needs of nutrition, clothing, and shelter. KFM's are apparently much higher than poverty lines estimates but are widely accepted as important indicators for evaluating welfare trends. Several researchers argue that the KFM is actually "quite low."