Capping the minimum wage in Indonesia

The Indonesian government has made a move that could raise the numbers in poverty.

Australian radio reports that the minimum wage in Indonesia has been capped at a rate less than inflation.

The cap is at 6 percent while inflation in the country is expected to be 10 percent.

As the Australian Network notes, industry applauds the move while trade unions are not so sure.

There's concern poverty will rise in Indonesia after the Government decided to cap minimum wage increases to less than inflation.

Radio Australia's Karon Snowdon reports that wage increases for the lowest paid have been capped at six per cent instead of the usual compensation for inflation which is running at about ten per cent.

The national government has set the maximum in the face of the slowing global economy.

The move has been welcomed by industry groups and some but not all trade unions as a way to prevent job losses.

The International Labour Organisation's Director for Indonesia, Alan Boulton says continuing high inflation will cause hardship.

"It could cause quite a lot of people living on a dollar or two dollars a day to fall below poverty lines," he said."