Minimum Wage Increase

KOMPAS/RADITYA HELABUMI

Workers hold a demonstration in front of the Jakarta City Hall, Jalan Medan Merdeka Selatan, Central Jakarta, Thursday (14/10/2021).

The average increase in the 2022 minimum wage is only 1.09 percent. Workers may not accept it, but it is certainly better than nothing at all.

Moreover, economic uncertainty in 2022 overshadows the minimum wage increase. President Joko Widodo has repeatedly emphasized this uncertainty. Indonesia must also prevent the potential resurgence of Covid-19 in the first quarter of 2022.

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Many companies are still struggling to bounce back in the fourth quarter of this year. Other companies are still maintaining salary cuts in order to survive. Meanwhile, many industries are maintaining reduced working hours in order to keep costs down.

Workers who get a raise next year are luckier because many others may not see any increase at all. Although unemployment has decreased, as many as 9.1 million people were still unemployed as of August 2021.

The government also provided wage subsidies to ease workers’ economic burden during the pandemic. Compared to small traders and workers in traditional markets who earn daily wages, industrial workers are luckier.

Furthermore, the increase in the minimum wage cannot be too high, because this is related to the competitiveness of our products. If the prices of our products and services are too high, no one will buy them. Don't forget that global business competitiveness has never declined, even during the pandemic.

KOMPAS/RONY ARIYANTO NUGROHO

Eman Sulaeman's noodle factory worker activities in Pancasan, Bogor City, West Java, Friday (16/4/2021).

Business owners in this country must also take into account many things, not just wages but also the various challenges that lie ahead, such as our infrastructure, which is less reliable than that in other countries, and the shortage of containers for shipping products that are ready to export. Such challenges certainly affect production costs.

However, we agree with Coordinating Economic Minister Airlangga Hartarto's statement regarding the wage increase. "Regarding wages, the most important thing is that there is a raise and more people can work. If production grows, workers will also get bonuses,” he said.

Manual processing is no longer effective in overseeing the wages of thousands of workers.

Even though the wages increase is only around 1 percent, its implementation must be monitored closely to ensure it is fully realized. As for effectiveness, we agree on the need to use digital technology in supervising the wage increase. Manual processing is no longer effective in overseeing the wages of thousands of workers.

Using digital technology will not only reduce employee costs but also expand oversight. The wider the scope, a greater number of workers will receive their rights.

In addition to overseeing the implementation of the minimum wage increase, we must not forget to constantly monitor our competitiveness. The world is not only beset by uncertainties, it is also changing rapidly. Be ready. Don't be a dinosaur and risk imminent extinction.

(This article was translated by Hendarsyah Tarmizi).