By: Asep Sarifudin )*
The community rejected the demonstrations of workers who tried to demand an increase in the minimum wage. Besides the potential to cause new clusters of Covid-19, labor demonstrations are not good because many people are actually losing their jobs due to the Corona virus pandemic.
Before deciding to increase the UMP, of course, there must be an affirmation, which industries have recovered and which have not. If the UMP increase is carried out, of course, the company must increase production costs during the recovery period.
Ida Fauziah as the Minister of Manpower said that the minimum wage conditions in Indonesia were too high, making it difficult for employers to reach. It is measured by a method called the Kaitz Index.
He said that there is a method that is internationally used to measure the level of a minimum wage in a region, namely by comparing the applicable minimum wage with the median wage.
Ida continued, the current minimum wage in almost all regions has exceeded the median wage. In fact, Indonesia is the only country with a Kaitz Index greater than 1, which should ideally be in the range of 0.4 to 0.6.
He explained that the condition of the minimum wage which is too high causes most employers to be unable to reach it and will have a negative impact on its implementation in the field.
This is very visible, namely with the minimum wage being used as an effective wage by employers so that wage increases tend to only follow the minimum wage as wages tend to only follow the minimum wage without being based on individual performance.
Without a demonstration, the government will continue to raise the UMP. The central government through the Minister of Manpower has taken a decision regarding the UMP for 2022. This decision will become a reference for all regions in Indonesia, although it has received many rejections from a number of labor unions. For business activities affected by Covid-19, the 2021 UMP will not increase or be the same as the 2020 UMP.
It is known that the labor element demands that the UMP in 20222 be increased by 7-10% from this year. However, this demand certainly cannot be immediately approved. For information, the DKI Jakarta UMP in 2021 is still the highest in Indonesia, the UMP in Jakarta is currently at Rp 4,416,186,548.
If referring to the calculation of the increase in the 2022 minimum wage set by the Minister of Manpower, which is 1.09 percent, the Jakarta UMR in 2022 is IDR 4,464,322.98. This shows that the UMP DKI Jakarta 2022 is the highest compared to 33 other provinces throughout Indonesia.
During the pandemic we all know that Indonesia is still surrounded by an economic slowdown, so it will take a few months for things to get back to normal. Tauhid Ahmad as Executive Director of the Institute for Development of Economic and Finance (Indef) said the increase in the UMP in the midst of an economic slowdown will encourage entrepreneurs to increase the prices of their products. As a result, the competitiveness of Indonesian products will decrease.
West Java Governor Ridwan Kamil admitted that he was afraid to increase the UMP, he took the decision to prevent termination of employment (PHK). The reason is that many industries in the area have been affected by the Covid-19 pandemic.
On a different occasion, the General Chair of the DPD Association of Indigenous Indonesian Entrepreneurs (HIPPI) of DKI Jakarta, Sarman Simanjorang, said that in the conditions of the COVID-19 pandemic, it is not good for labor unions or workers to ask for an excessive increase in the UMP.
Moreover, many entrepreneurs are currently racking their brains to find solutions, how to keep their businesses afloat until the economy returns to normal.
Sarman also believes that if the Indonesian economy is getting better, regional economic growth is getting higher and quality, then the UMP in the coming years will experience a positive increase.
Of course, no one can guarantee that the Indonesian economy will recover and get better in the future, everything will return to the extent to which we are jointly trying to prevent the spread of Covid-19.
The demonstration demanding an increase in the UMP seems to have become an annual agenda for trade unions to take to the streets and voice the high UMP increase, of course the increase in the UMP cannot be implemented immediately, but requires a process.
)* The author is a contributor to the Pertiwi Institute
