Asymmetric Policy for Solidarity

KOMPAS/HELENA F NABABAN

Anies Baswedan, Governor of DKI Jakarta explained about the development of Covid-19 in DKI Jakarta, Wednesday (11/03/2020).

Jakarta Governor Anies Baswedan has increased the 2021 provincial minimum wage (UMP) by 3.27 percent for companies unaffected by the COVID-19 pandemic.

Anies’ decision is a response to Manpower Minister Circular No. M/11/HK.04/2020, dated October 26, concerning the determination of 2021 UMP. Through this letter, Manpower Minister Ida Fauziyah urged governors to maintain the 2021 UMP at the current levels (2020 UMP). Ida’s decision to leave the minimum wage unchanged is a compromise for both employers and workers. The COVID-19 pandemic has caused serious economic hardship for many sides.

Also read: 2021 Minimum Wage

The Jakarta administration is not alone in applying discretion in regard to the circular. Five out of 34 provinces in the country have applied their own discretion over direction as stipulated in the circular. The provinces that decided to raise the minimum wage also include Central Java, East Java, South Sulawesi, and the special region of Yogyakarta. East Java Governor Khofifah Indar Parawansa even took the decision further by increasing the province’s 2021 UMP by 5.65 percent.

Meanwhile, Anies increased the UMP from Rp 4.2 million per month in 2020 to Rp 4.4 million per month in 2021. Anies said the implementation of asymmetric increase over the 2021 UMP was necessary to uphold the sense of justice. The 2021 UMP will not be applied on companies that are affected by the pandemic. But companies in Jakarta still need to inform their wage policy to the administration (Kompas, November 2, 2020).

Also read: Not All Regions Follow Instruction to Maintain Minimum Wage

KOMPAS/TATANG MULYANA SINAGA

Around 1,000 workers demonstrated against the Minister of Manpower Circular addressed to governors throughout Indonesia regarding the determination of the 2021 Minimum Wage during the Covid-19 Pandemic at Gedung Sate, Bandung City, Monday (27/10/2020). They are demanding an increase in the 2021 minimum wage of 8.5 percent.

Representatives of workers and employers approved Anies’ asymmetric minimum wage increase, saying the policy was fair for everyone. During the pandemic, many people have lost their job because their employers were unable to operate or even closed down. Many entrepreneurs also face serious difficulties. Nonetheless, some businesses can keep growing or obtain handsome profits during the pandemic, such as the telecommunication and health care sectors.

Nevertheless, the Jakarta administration’s decision to raise the 2021 UMP for unaffected businesses is still controversial and sparks debate among the public. Although business like medical mask pro-duction is perceived as profitable, incumbents might argue that the pandemic has raised business competition because many companies are shifting into this market for survival. Consequently, some companies are seeing their market share shrink and they cannot attain the expected profit. In this case, raising the minimum wage will create an additional cost for businesses and force them to flee.

Also read: Ida Fauziyah: Job Creation Law Will Overcome Investment Barriers

Businesses should be open and honest about their situation, so the Jakarta administration can achieve its policy goal of creating fairness through an asymmetric increase for the 2021 UMP. Employers’ associations and labor unions should assist the government in monitoring the actual condition. Moreover, the Jakarta administration should issue a clear regulation on how to implement its asymmetric minimum wage increases. There should be no room for further compromise on this policy.

It should be remembered that the government needs the business community to keep the economy growing. Likewise, companies also need workers to continue production process. Workers and employers need the government to provide protection and law enforcement. Everyone needs each other.