DKI Provincial Government: Bad High UMP, Closed Companies Later, Many Layoffs

JAKARTA - Head of the DKI Jakarta Manpower, Transmigration and Energy Agency, Hari Nugroho, said that the increase in the provincial minimum wage (UMP) was not good for the future economic impact.

This is because the high UMP can result in many companies being unable to pay their workers' salaries according to the minimum wage limit if these are set.

"In my opinion, it is also understood, because the UMP is too high is also not good. Later many companies will close, there will be more layoffs," Hari told reporters, Monday, November 20.

The DKI Provincial Government has formulated the amount of the 2024 UMP based on Government Regulation Number 51 of 2023 which is a reference for the central government. According to Hari, this regulation has accommodated the needs of the UMP formulation that the company and workers want.

"Yesterday, when discussing the revision or plan to change PP (to PP Number 51 of 2023) there were already public discussions, expert team studies, and others. This means that it has been calculated properly. So, of course, it is ripe, with that calculation," explained Hari.

For information, the determination of the value of the 2024 UMP will be stated in the governor's decision (kepgub). Acting Governor of DKI Jakarta Heru Budi Hartono has until November 21, 1023 to sign the governor's decree.

The determination of the amount of the UMP as outlined in the gubernatorial decree is based on the evaluation of the Wage Council session discussed by the government, elements of entrepreneurs, elements of workers, and other stakeholders.

The Wage Council session which was held on Friday, November 17 at the DKI Jakarta City Hall had been tough. Like in previous years, members of the Wage Council from elements of entrepreneurs disagreed with the elements of workers in recommending an increase in the UMP.

Finally, the Wage Council session produced three different recommendations. In a written statement, the Head of the DKI Jakarta Manpower, Transmigration and Energy Office Hari Nugroho explained that Jakarta UMP recommendations in 2024 from entrepreneurial elements were around Rp. 5 million.

"Members of the Wage Council of DKI Jakarta Province, elements of the Entrepreneurs Organization, propose the amount of the DKI Jakarta UMP value in 2024 using a formula regulated in Government Regulation (PP) Number 51 of 2023 concerning Wages using alpha 0.20 from DKI Jakarta economic growth, so that the DKI Jakarta UMP in 2024 will be IDR 5,043,068," said Hari.

Meanwhile, the labor group gave a recommendation for the value of the 2024 UMP of IDR 5.6 million. They did not use the formula (PP) Number 51 of 2023 which became a reference for the central government.

"Members of the Wage Council of DKI Jakarta Province, elements of trade unions/labor unions, proposed an increase in the value of the DKI Jakarta UMP in 2024 by 15 percent, with details using the DKI Jakarta Inflation formula of 1.89 percent, plus DKI Jakarta's economic growth of 4.96 percent, plus a certain index of 8.15 percent to Rp5,637,068," explained Hari.

Then, the government element also provides recommendations that still refer to PP Number 51 of 2023. However, the DKI Provincial Government uses alpha or a calculation limit of a little more than a group of entrepreneurs.

"Members of the Wage Council of DKI Jakarta Province, elements of the Government, propose the amount of the value of the DKI Jakarta UML in 2024 based on the formula regulated in Government Regulation Number 51 of 2023 using alpha 0.30 of DKI Jakarta's Economic Growth so that the DKI Jakarta UMP in 2024 will be IDR 5,067,381," he explained.