Apindo Says Anies Violated Wage Regulations Related To The 2022 DKI Jakarta UMP Increase: He Revised Unilaterally

JAKARTA - Chairman of the Indonesian Employers' Association (Apindo) Hariyadi Sukamdani assessed that the Governor of DKI Jakarta Anies Baswedan had violated the wage regulations related to the revision of the increase in the provincial minimum wage (UMP) for DKI Jakarta in 2022.

At the end of last week, Anies revised the amount of the increase in the DKI Jakarta UMP in 2022 from 0.85 percent to 5.1 percent or an increase of IDR 225,667 from the 2021 UMP.

"In this case, we see that the regional head, the Governor of DKI Jakarta, has violated the wage regulations, namely those contained in Government Regulation (PP) Number 36 of 2021 concerning Wages," he said at an online press conference in Jakarta, quoted from Antara, Monday 20 December.

Hariyadi said that the Governor of DKI Jakarta violated the provisions in the PP Wages, in particular Article 26 concerning Procedures for Calculation of the Minimum Wage; Article 27 regarding UMP; and Article 29 regarding the time for determining the minimum wage that should be for the province no later than November 21, 2021.

In addition, the Governor of DKI Jakarta is also considered to have unilaterally revised the UMP without taking into account the opinion of the business world.

"In this case, Apindo DKI Jakarta has expressed its objection because if it is done it will violate PP 36/2021," he said.

Furthermore, Hariyadi said that the revision of the DKI Jakarta UMP submitted by the Governor of DKI Jakarta would make efforts to restore the UMP as a social safety net difficult to implement.

According to him, the UMP is a social safety net that can be used to implement a pay scale structure. This is because the minimum wage is the wage applied to inexperienced workers.

"You can imagine that if the minimum wage still uses the previous concept of the minimum wage being the average wage, then the space to enforce this wage scale structure will be difficult. The layer for workers above the minimum wage will be very small or even non-existent. This is a problem as well ," he said.

Hariyadi added that the revision of the UMP was also considered to pose a big risk for new job seekers. Novice workers will lose opportunities because the minimum wage is high so companies will naturally choose experienced workers.

"So the opportunities for new workers are increasingly limited," he said.

Previously, the Governor of DKI Jakarta Anies Baswedan revised and increased the 2022 Provincial Minimum Wage (UMP) in DKI by 5.1 percent to IDR 4,641,854 from the previous stipulation of only 0.85 percent of IDR 4,453,935.

The Governor of DKI explained that the revision was based on a study by Bank Indonesia which projected Indonesia's economic growth in 2022 to reach 4.7 percent to 5.5 percent.

Then, inflation is projected to be controlled at 3 percent or in the range of 2 to 4 percent. Likewise, a study by the Institute for Development of Economics and Finance (Indef) projects that Indonesia's economic growth in 2022 will be 4.3 percent.

Anies explained that the decision was also based on a review and re-discussion with all relevant stakeholders, as well as with the spirit of prudence in the midst of the economic pace of Jakarta starting to move.