Workers Demand Minimum Wages be Increased by 8%, Entrepreneurs: We Are Psychologically Shaken

Ilustrasi. (Irfan Meidianto/VOI)

JAKARTA - Chairman of the Association of Indigenous Indonesian Entrepreneurs (HIPPI) DKI, Sarman Simanjorang, said that he rejected workers' demands regarding an increase in the minimum wage by 8% in 2021.

Sarman said the COVID-19 pandemic jammed the wheels of the economy. It has an impact on the business sector. He regretted the workers that demanded an increase in wages during the pandemic.

"Workers ask for an increase in the UMK by 2021 to 8%, of course, it is unfortunate. In a pandemic like this, the KSPI has made the psychological atmosphere of entrepreneurs even more uneasy," Sarman told reporters, Sunday, September 6.

Sarman said that Government Regulation Number 78 of 2015 allows for no increase in the provincial minimum wage (UMP), district/city minimum wages (UMK), and district/city sectoral minimum wages (UMSK) under certain conditions with several indicators.

"The indicators are clear. Our economic growth in the first quarter of 2020 is estimated at 2.97 percent. The second quarter contracted minus 5.32 percent. Meanwhile, with current economic conditions, our economic growth is predicted to contract minus. It means that a recession is in sight," he continued.

If workers demand an increase in the minimum wage to maintain people's purchasing power, the government has launched several subsidy programs for workers.

One of these programs is a worker incentive of IDR 600 thousand per month for four months for 25 million workers who registered in BPJS Kesehatan.

"The government has also provided working capital assistance to micro-entrepreneurs as much as IDR 2.4 million targeting 12 million MSMEs, the Pre-Work Card program, and other social assistance to the community," explained Sarman.

Sarman stated that, currently, entrepreneurs are struggling to save their businesses until the COVID-19 pandemic passes. Then, workers should also understand the entrepreneur's financial condition.

"We need to work together to fight COVID-19. If there is a request for an increase in the UMP or UMK in 2021, it is very unreasonable and does not seem to want to know the difficulties faced by business actors today," he added.

Previously, the Confederation of Indonesian Workers Unions (KSPI) demanded an increase in district/city minimum wages (UMK) and district/city sectoral minimum wages (UMSK) in 2021 by at least 8%.

President of KSPI, Iqbal, said that the 2020 minimum wage increase is not much different from the amount of the 2020 wage increase of 8.5%, 2019 of 8.03%, and 2018 of 8.71%.

Said admits, 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 2 quarters, people's purchasing power must be maintained. Thus, despite inflation, prices of goods remain affordable with a reasonable increase in wages," said Said.