, , ,


Source: Cascade Asia Advisers here, with high resolution image here

A few days ago in the post here I stated that minimum wages were largely absent across Southeast Asia.

Well, not for the first time I was wrong, at least regarding Indonesia. As the graphic makes clear Indonesia has a minimum wage, although how thoroughly it is enforced is a different question.

I had originally intended to explore the significant disparity in minimum wages across the country, however I have realised that would take more time than I have available right now.

Suffice to say that setting minimum wage levels is a legislative action, and thus the decisions are grounded in politics. Interestingly however, the polical pressures affecting the setting of these rates vary across the country, suggesting that there are either hidden barriers to free movement of labour, Indonesia isn’t as economically unified as it may appear (which are effectively different sides to the same coin) or that these minimum wage settings are largely symbolic political gestures occuring below the market rate.