Manpower Ministry to Determine 2022 Minimum Wage

TEMPO.CO, Jakarta - The Director General of Industrial Relations and Labors Social Security of the Ministry of Manpower, Indah Anggoro Putri, has said the ministry is currently discussing the process of determining the 2022 Minimum Wage.

The Government Regulation (PP) Number 36 of 2021 concerning Wages mandates that the minimum wage setting policy is one of the national strategic programs.

"The government is present by regulating the minimum wage. The government cares about the interests of workers/laborers and entrepreneurs as well as business continuity," Putri stated in a written statement on Sunday.

The minimum wage is intended to protect workers/laborers with less than one year working period from receiving low wages. The minimum wage policy is intended as an instrument for alleviating poverty and boosting Indonesia's economic.

"The minimum wage stipulated in Government Regulation Number 36 of 2021 is based on region, namely the provincial minimum wage (UMP) and the district/city minimum wage (UMK)," she informed.

The previous government regulation number 35 of 2021 did not mandate minimum wages by sector. However, for the sectoral minimum wage set before November 20, 2020, the minimum wage can be continued as long as the amount is still higher than the UMP or UMK in the region.

She hopes that later, each party will support the decision of the 2022 Minimum Wage in accordance with PP No. 36/2021 on wages.

Director of Labor Relations and Wages Dinar Titus Jogaswitani said the purpose of PP number 36 of 2021 is to reduce the minimum wage gap, to create equality between regions. This effort is achieved through the approach of average household consumption in each region.

Jogaswitani later says the  minimum wage is also aimed to improve  the welfare of workers/laborers while still considering the company's finance and national conditions. This is done through the economic and employment data sourced from the Central Bureau of Statistics (BPS).

BPS as the only national data trustee is an independent and competent institution in terms of providing macro data needed by all interested parties, she added.

The data provided by BPS which is used in calculating the minimum wage has been collected by BPS before the ratification of PP number 36 of 2021. Data for calculating minimum wage can be accessed at wagepedia.kemnaker.go.id.

"The data is also used by other institutions, both local and international, in planning or decision making," Jogaswitani conveyed.

The National Wage Council's wage expert, Joko Santosa, stated that setting a minimum wage is important to increase Indonesia's competitiveness index and increase investor confidence in Indonesia's wage system related to legal certainty as well as economic and employment indicators.

In addition, another impact that may hamper the implementation of the 2022 minimum wage is the ongoing COVID-19 pandemic which causes delay of job opportunities, the substitution of labor to machines, layoffs, relocation from high UMK region to lower UMK region, and   business bankruptcy.

"We also need to establish dialogue on wage agreements and scaling the wage rate above the minimum," he said.

Santosa also invited all parties to focus on adjusting wages above the minimum. Moreover, when the minimum wage is already above the average, all parties should focus on wages based on individual performance and productivity to encourage the workers' welfare.

Read: Workers Stage Rally Demanding Higher 2022 Minimum Wage by 10%

ANTARA