Unions insist on minimum wage in 2021 to continue increasing Page all

JAKARTA, KOMPAS.com – The Indonesian Trade Union Confederation (KSPI) rejected the government’s decision to raise the minimum wage next year. Several unions will take to the streets to protest against the policy.

KSPI President Said Iqbal emphasized that the action to reject the 2021 minimum wage decision will be carried out in conjunction with the protest against the approval of the Employment Creation Law.

“So there is no reason why the minimum wage from 2020 to 2021 should not increase because economic growth is at a negative point,” Iqbal said in his statement quoted on Tuesday (10/27/2020).

He then compared the conditions of the economic crises that occurred in 1998, 1999 and 2000. For example, he said, in DKI Jakarta, the increase in the minimum wage from 1998 to 1999 continued to increase by about 16 percent, while economic growth in 1998 was minus 17.49 percent.

Also read: The government decides that next year’s minimum wage will not increase

Said said, the same happened with the minimum wage from 1999 to 2000. At that time, he said, the minimum wage was still increasing about 23.8 percent, while economic growth in 1999 was minus 0.29 percent.

Job proposals

As revealed, the increase in the minimum wage next year will boost economic growth due to an increase in the purchasing power of workers.

Furthermore, he continued, not all companies were in trouble due to the Covid-19 pandemic. Therefore, KSPI requested that the salary increase policy be carried out on a proportional basis.

For companies that are still capable, they must raise the minimum wage. Then, for companies that cannot afford it, the law offers a way out by deferring the minimum wage.

Also read: Reasons why the government refuses to increase the minimum wage next year

Said Iqbal also said that the government, in this case the Minister of Manpower (Menaker), has no empathy for the current fate of workers.

“Menaker has no sensitivity to the fate of workers, he only looks at the interests of employers only,” he said.

He hopes that the government can follow the minimum wage policy when Indonesia is hit by a crisis. The pay increase will continue to apply to workers working in companies that are relatively unaffected by the pandemic.

“Don’t be beaten by all the poor companies. In fact, in 1998 there was still a minimum wage increase to maintain people’s purchasing power,” he said.

Also read: Minimum wage does not increase, KSPI: Menaker has no sensitivity to job fate!

In response to the government’s decision, KSPI will carry out massive national actions in 24 provinces on November 2 and will continue again from November 9 to 10 in the Constitutional Court, the Palace, the People’s Democratic Republic of RI and in the office of the governor throughout Indonesia.

First, if the minimum wage does not increase, it will only make the situation even hotter. Especially at this time the workers continue to fight for the rejection of the Employment Creation Law. Second, the reason that wages are not increasing is because currently less economic growth is not correct.

Third, if the minimum wage does not increase, people’s purchasing power will decrease. The decrease in purchasing power will cause a drop in the level of consumption. In the end, it has a negative impact on the economy.

Fourth, not all companies are in trouble due to the Covid-19 pandemic. Therefore, he requested that the salary increase policy be carried out in a proportional manner.

Also read: Count of versions for entrepreneurs, next year’s minimum wage will not increase

Government reasons

Earlier, Labor Minister Ida Fauziyah confirmed that there would be no increase in the minimum wage next year, both the provincial minimum wage (UMP) and the district / city minimum wage (UMK).

This is indicated in Circular Letter Number M / 11 / HK.04 / X / 2020 regarding the Determination of the Minimum Wage in 2021 during the Corona Virus Disease Pandemic 2019 (Covid-19).

The reason the government will not raise the minimum wage next year is that the Indonesian economy is currently in a recovery period. According to the government, rising wages in 2021 will indeed be a burden on the business world.

“To provide protection and labor continuity to workers / day laborers and maintain business continuity, it is necessary to make adjustments to the determination of the minimum wage in the situation of economic recovery during the Covid-19 pandemic,” Ida said in a circular.

Also read: KSPI still calls for the minimum wage to increase in 2021

The circular was signed on October 26, 2020. Thus, next year’s minimum wage is the same as this year, or it does not increase or decrease.

Ida asked the governor to implement the minimum wage determination after 2021 in accordance with the provisions of the laws and regulations.

In addition, this 2021 minimum wage will be established and formally announced by all local governments at the end of October 2020.

“Taking into account the condition of the Indonesian economy during the Covid-19 pandemic and the need for a national economic recovery, the Governor is asked to: 1. Make adjustments in determining the value of the 2021 minimum wage to the value of the 2020 minimum wage, “Ida said.

Also read: The minimum wage in 2021 will be lower than in 2020

For information, in Government Regulation (PP) Number 78 of 2015, the formula to determine the increases in the minimum wage is obtained from the results of the increase in inflation and economic growth.

Entrepreneur application

Meanwhile, employers have asked the government not to raise the minimum wage, either in the district / city (UMK) or the provincial minimum wage (UMP) next year. The reason is that current economic conditions remain difficult due to the impact of the Covid-19 pandemic.

The president of the Indonesian Indonesian Businessmen Association of DPD Jakarta, Sarman Simanjorang, said that if the calculation of the UMK is based on the rules that are still in force, namely PP Number 78 of 2015, then in reality there is no increase on the minimum wage in 2021.

“If you use the UMP and UMK formulas, you still use PP No. 78/2015, it seems like there is no increase. Based on the formula, the increase is zero percent,” Sarman said. Kompas.com.

Also read: These are the minimum wage rules for employees in the Job Creation Act

Sarman explained that in the regulation the calculation of the increase in the minimum wage for the following year is based on the minimum wage for the current year multiplied by inflation plus economic growth.

“Now if we use that calculation, now the economic growth in one year can be estimated at zero percent or maybe less. So this year it will experience deflation, not inflation,” Sarman said.

“This means that if you use PP No. 78/2015, there is no need for an increase in UMP and UMK,” added Sarman, who is also the vice president of DKI Jakarta Kadin.

Previously, the government through the Ministry of Manpower (Kemnaker) considered a proposal that the provincial minimum wage (UMP) in 2021 be the same as in 2020. This is in accordance with the decision of the National Wages Council.

Also read: UMK abolished in job creation law? Menaker: I affirm that district / city minimum wages will be maintained!

(Source: KOMPAS.com/Ade Miranti | Editor: Erlangga Djumena, Sakina Rakhma Diah Setiawan, Yoga Sukmana)