The Government of the Republic of Indonesia (RI) has made adjustments to the Provincial Minimum Wage (UMP) based on many comprehensive studies. Apart from that, the economic conditions of each province also determine the size of the UMP in each region. Therefore, workers are advised not to be easily provoked by the dissemination of various kinds of news on social media whose truth cannot be ascertained.
The Director General of Industrial Relations Development and Employment Social Security of the Ministry of Manpower (Kemnaker) of the Republic of Indonesia, Indah Anggoro Putri, explained the real reasons behind how the calculation of the provincial minimum wage (UMP) in 2024 cannot follow the wishes of the workers. increased to 15 percent.
It should be noted that the formulation regarding the 2024 UMP increase itself refers to Government Regulation (PP) Number 51 of 2023. In this regulation, the calculation of the minimum wage increase is regulated based on the UMP adjustment value, by adding inflation to the product of economic growth plus a certain index. .
This particular index is symbolized as alpha, which ranges from 0.1 to 0.3. For information, the existence of this index is obtained from the suitability of the contribution of workers to the economic growth in the area they live in. The reason is that economic growth itself is not only supported by employment alone.
Several other sectors that can also be considered as supporting economic growth in a region are the energy, mining, tourism, government spending, taxes and export-import sectors.
Then, according to the results of discussions held with the Wage Council with expert elements consisting of academics in the fields of economics, demography and statistics, in fact the maximum contribution from the employment sector in a region is around 30 percent.
In fact, there are two provinces in Indonesia, where the contribution of the labor sector itself to economic growth in the region is recorded as minus. Because there are several areas whose employment contribution there is actually recorded as minus, the Government then took an ideal calculation range, namely 0.1 to 0.3.
So, the amount of the particular index contained in PP number 51 of 2023 is clearly very much in accordance with existing economic and demographic studies, when calculated based on the formula of total labor compensation to gross regional domestic product (GRDP).
While there are still some parties who think that the calculation of the UMP is too small, this is actually the reality in the field. This is indeed the case as stated in PP Number 51 of 2023, namely that in fact the employment contribution only reaches around 30 percent.
Therefore, the government then gave authority to the Wage Council of a province in making decisions, between the triparit in the Wage Council. The party that formulates and adopts these policies is not only the government, but also the trade unions themselves, experts or academics, and even entrepreneurs.
Meanwhile, the West Java Provincial Government (Pemprov) has also determined the provincial minimum wage (UMP) in 2024. Through the Decree of the Governor of West Java Number 561/Kep.768-Kesra/2023, the UMP in West Java itself next year is set at IDR 2,057,495 or an increase of 3.5 percent from the previous year.
In calculating the UMP amount, the West Java Provincial Government itself has also referred to Government Regulation (PP) Number 51 of 2023 concerning Wages as a replacement for PP Number 36 of 2021. This regulation also regulates the formula for calculating the minimum wage.
Head of the West Java Manpower and Transmigration Service, Teppy Wawan Dharmawan, explained that the West Java Provincial Government and the Wage Council have agreed that the alpha value used to determine the amount of the UMP in 2024 is 0.25. Determining the index number is as dividing the quadrant between 0.1 to 0.3.
Furthermore, the West Java Provincial Government also determines the inflation and economic growth values used to calculate the minimum wage. The inflation value used alone is 2.35 percent, while economic growth is 4.86 percent. With all these formulations, the adjustment to the UMP value is inflation plus economic growth times alpha in brackets.
The existence of workers’ demonstrations to demand an increase in the minimum wage should also be in accordance with the facts and study data or complete formulation calculations. The reason is, in fact all calculations for determining the UMP determined by the government itself are in accordance with a very comprehensive study taking into account many other things.
With various kinds of data and existing facts, it turns out that the contribution of employment to economic growth is around 30 percent, how to calculate or formulate the increase in the UMP has been considered very carefully. For this reason, workers should not be easily provoked by various invitations or appeals, resulting in the spread of hoax news and false information which will actually be inflammatory.
