2024 Work Wage Rises With New Rules, House Of Representatives Commission IX: Win Win Solution

Rupiah (Photo: Antara)

JAKARTA - Commission IX of the DPR appreciates the increase in the Provincial Minimum Wage (UMP) in 2024 through a new calculation formula that can encourage an increase in people's purchasing power and has an impact on the absorption of goods and services produced by entrepreneurs. Commission IX of the DPR RI considers the new regulation as a solution for workers and the company.

"I think the new Formula set by the Ministry of Manpower (Kemenaker) is a win win solution between workers and employers, especially employers. Because there is a balance for all parties, including the Government as a regulator," said Member of Commission IX DPR RI, Arzeti Bilbina, Monday, November 13.

The government through the Minister of Manpower (Menaker) Ida Fauziah has issued a new regulation on wages, namely Government Regulation No. 51 of 2023. This rule is a revision of Government Regulation No. 36 of 2021 concerning Wages, and will take effect on November 10, 2023.

Through PP No. 51/2023, the certainty of an increase in the minimum wage for workers is now obtained through the application of the Minimum Wage Formula which includes 3 variables, namely inflation, economic growth, and certain indexes (symbolized in the form of a).

The certain index as referred to is determined by the Regional Wage Council by considering the level of employment and average employment or median wages. In addition, other considerations are factors that are relevant to employment conditions.

This formula is also a form of appreciation to workers and laborers who have contributed to Indonesia's economic development. Arzeti said the new regulation is a solution to ensuring work and business continuity.

"As stated by the Minister of Manpower, the increase in the minimum wage with this new formula can encourage an increase in people's purchasing power. Of course this will have a positive impact on the national economy and become one way to balance the distribution of economic benefits," said the legislator from the East Java I electoral district.

With three variables of calculating the work wages in the new rules, Arzeri assesses that economic and labor conditions in an area will be accommodated in a balanced manner. He also said that this rule realizes a just wage system in the company, one of which is by implementing the structure and scale of wages.

Moreover, this new regulation prevents the gap or disparity of the minimum wage between regions. So that there is justice in the wage system for all workers in Indonesia because the income of workers in low-UMP cities also deserves more attention," explained Arzeti.

The House of Representatives Commission in charge of employment affairs also assessed that PP No. 51/2023 complements the existing regulations. Arzeti said that the implementation of the structure and scale of wages in the new format of the UMP calculation would motivate the productivity and performance of workers.

This rule also provides legal certainty for the business world and industry. However, supervision must be ensured so as not to harm workers, especially those who work in companies on a small and medium scale," continued Arzeti.

With the support for the absorption of goods and services produced by entrepreneurs through this new formula, the company will also be healthier because there is an increase in production. Arzeti said this could have a positive effect on creating new jobs.

The provincial minimum wage is set by the Governor's Decree and announced no later than November 21. Meanwhile, the district/city minimum wage is set with a Governor's Decree and announced no later than November 30. The UMP increase must take effect on January 1, 2024.

Arzeti invited policy makers, including the Governor, Head of the Office in charge of manpower, and the Regional Wage Council to carry out the mandate of PP No. 51/2023 carefully.

"The determination of the Provincial Minimum Wage and Regency/City Minimum Wage must be carried out in accordance with the set deadline, taking into account the needs and dynamics of each region," concluded Arzeti.