Help Increase Purchasing Power, Workers Demand An Increase In Minimum Wage Of 8 Percent

Illustration. (Photo: Ministry of Industry)

JAKARTA - The Confederation of Indonesian Workers Unions (KSPI) demands an increase in the district / city minimum wage (UMK) and district / city sectoral minimum wages (UMSK) in 2021 by at least 8 percent.

President of KSPI Said Iqbal said the increase in the 2020 minimum wage was not much different from the amount of the 2020 wage increase of 8.5 percent, 2019 of 8.03 percent, and 2018 of 8.71 percent.

Said admits that he understands that the economic condition is weakening due to the COVID-19 pandemic, but the minimum wage increase must be maintained. Because, there could be inflation in the future.

"Even though economic growth has contracted minus in the last two quarters, people's purchasing power must be maintained. Thus, despite inflation in the price of goods, it is still affordable with a reasonable increase in wages," Said said in his statement, Saturday, September 5.

Said said that with the 8 percent increase in the minimum wage, the purchasing power or the value of public consumption would be maintained, as well as an effort to recover the economy.

Said then compared it with the economic conditions in 1998, 1999 and 2000. In DKI Jakarta, the minimum wage increase from 1998 to 1999 continued to increase by around 16 percent, whereas the economic growth in 1998 was minus 17.49 percent.

Likewise with the 1999 to 2000 minimum wages, the minimum wages continued to increase by around 23.8 percent, whereas the economic growth in 1999 was minus 0.29 percent.

"So, there is no reason for the minimum wage from 2020 to 2021 not to increase, because economic growth is at a minus. This is nothing new, when the economy is minus, wages will still be raised," said Said.

Even so, companies in certain industries that suffered heavy losses due to the COVID-19 pandemic and objected to demands for an 8 percent wage increase, Said invited to apply for a suspension.

In this case, these industries are hotels, airlines, restaurants, and domestic labor-intensive industries. The postponement, said Said, still had to have agreement with the labor union and it was proven by a financial report stating that it was really a loss.

"In essence, KSPI is of the opinion that this condition cannot be beaten flat. Just because the economic growth is minus, all companies cannot then not increase their minimum wage," he said.