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EnglishEverchanging Concept of Minimum Wage

Everchanging Concept of Minimum Wage

Under the international concept, minimum wage is a form of protection provided by the state to workers as a social safety net so that the wage of workers does not fall into the free market mechanism.

Oleh Rekson Silaban
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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.

Under the international concept, minimum wage is a form of protection provided by the state to workers as a social safety net so that the wage of workers does not fall into the free market mechanism.

Why did the state intervene? Because there are groups of workers who are assumedly unable to protect themselves, such as workers with low education, those without skills, contract workers and workers whose working periods less than one year. Thus, there should not be workers whom are paid below the minimum wage (MW) because the concept of state protection is irrelevant. Unfortunately, the concept of MW in Indonesia is applied in a complicated way so that in its implementation there are a lot of trouble, they are difficult to comply with and prone to deviations.

Editor: naranasrullah
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