No Increase in Minimum Wage for 2021: Indonesian Minister

JAKARTA, KOMPAS.com – Indonesia’s Manpower Minister Ida Fauziyah has announced that the minimum wage will remain the same next year due to the Covid-19 pandemic.

The announcement was made following the signing of Circular No. M/11/HK.04/2020 on October 26. The government sent the circular to all governors throughout the country as the minimum wage rate is set by each governor.

“Due to the condition of the Indonesian economy during the Covid-19 pandemic and the need for national economic recovery, the governors are called to set the same minimum wage rate in 2021 as it was in 2020,” the Circular states.

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The 2021 minimum wage will officially be set and announced by all local governments by the end of this month, it added.

“The implementation of the minimum wage should be done after 2021 based on the laws and regulations. The announcement of the Provincial Minimum Wage for 2021 will take place on October 31, 2020,” it said.

Previously, the Confederation of Indonesian Workers Unions (KSPI) demanded an eight percent increase in the minimum wage rate next year.

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If the government fails to do so, KSPI said that workers will stage bigger demonstrations, besides the protests against the newly passed Omnibus Law on Job Creation.

KSPI chairman Said Iqbal has rejected the request from the business community who have voiced out their concern any increase in the minimum wage next year.

Said argued that the economic contraction during the Covid-19 pandemic should not be used as an excuse. If the minimum wage does not increase, the people’s purchasing power will decrease and has a negative impact on the economy, he added.

(Writer: Ade Miranti Karunia | Editor: Erlangga Djumena)

Source: https://money.kompas.com/read/2020/10/27/063127926/pemerintah-putuskan-upah-minimum-tahun-depan-tidak-naik