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Jakarta Post

Entrepreneurs association predicts zero increase in Jakarta’s minimum wage next year

  • News Desk

    The Jakarta Post

Jakarta   /   Thu, October 22, 2020   /   02:31 pm
Entrepreneurs association predicts zero increase in Jakarta’s minimum wage next year A Muamalat Bank employee uses his smartphone at work at the Muamalat Tower in Jakarta on Sept. 22. Finance Minister Sri Mulyani Indrawati projects the economy will contract between 0.6 and 1.7 percent this year due to the COVID-19 pandemic. JP/Seto Wardhana. (JP/Seto Wardhana)

The Indonesian Indigenous Entrepreneurs Association (HIPPI) has predicted that the provincial minimum wage (UMP) for Jakarta will see no increase in 2021 following economic slowdown due to the COVID-19 pandemic.

“With data on economic growth and inflation in 2020, the increase in UMP in 2021 is estimated at zero percent,” HIPPI chairman Sarman Simanjorang said in a written statement on Wednesday as quoted by kompas.com.

Sarman said a zero increase in UMP would be reasonable, considering many small and medium businesses had closed, employees had been laid off, employers’ cash flow had been affected and public purchasing power had weakened.

An increase in UMP would only make the situation worse for entrepreneurs facing the outbreak, he said.

“The burden on entrepreneurs is already big, so being able to survive the pandemic is already a blessing. If the UMP is raised, it will seriously hit entrepreneurs,” he said.

The International Monetary Fund (IMF) has predicted that Indonesia’s gross domestic product (GDP) will shrink 1.5 percent this year. 

The IMF projection is largely in line with the government’s estimate for a full-year contraction of 0.6 percent to 1.7 percent made in late September, down from GDP growth of 5.02 percent in 2019. 

Manpower Minister Ida Fauziyah said in August that around 3.5 million workers had been laid off or furloughed due to the effects of the COVID-19 outbreak.(syk)