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Apindo lobbies for limited increase in minimum wage
The Indonesian Employers Association (Apindo) seeks to constrain the 2022 minimum wage by demanding that an increase be based on the Job Creation Law rather than on labor union demands.
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Indonesian Employers Association (Apindo) chairman Hariyadi B. Sukamdani talks to the press at Apindo's headquarters in Jakarta on Dec. 11, 2019. (The Jakarta Post/Eisya Eloksari)
T
he Indonesian Employers Association (Apindo) seeks to constrain the minimum wage for next year by demanding that an increase be based on the Job Creation Law rather than on demands from labor unions.
In line with the jobs law, the increase would be based on either regional economic growth or inflation and as such, would be lower than the double-digit rise demanded by unions.
Regional administrations are expected to set next year’s minimum wages by the end of this month. They are still waiting for the latest GDP growth data, which Statistics Indonesia (BPS) will release on Friday.
Apindo chairman Hariyadi Sukamdani said the Job Creation Law and Government Regulation No. 36/2021 stipulated that the regional economic growth rate or inflation rate be used as the rate for the wage floor increase.
Prior to this legal framework, regional administrations would raise the wage floor by the economic growth rate plus the inflation rate.
“The current formula is appropriate. [It is based on] a calculation for the average consumption among the public,” Hariyadi said in a press briefing on Tuesday.
Amid the COVID-19 outbreak in 2020, the government decided to leave the minimum wage unchanged for this year. The pandemic forced businesses to stop operating and consumers to stay at home, causing the GDP to contract by 2.1 percent, BPS data shows.
