Minimum Wage Dilemma

Given that Indonesia has not fully recovered from the pandemic and the economy remains in an “abnormal” situation, the workers’ minimum wage demand is considered unrealistic.

KOMPAS/RONY ARIYANTO NUGROHO

-A number of female workers finish harvesting spinach vegetables at Kemang farm, Bogor Regency, West Java, Wednesday (21/4/2021). These women workers earn Rp. 70,000 per day for work.

The 2022 minimum wage increase using the new calculation formula is estimated to be just 2-3 percent, far lower than that demanded by workers as well as the average increase over the last five years.

To cope with the decline in buying power among workers due to the minimal increase in the minimum wage, the government has been urged to provide various incentives and social assistance to maintain their buying power (Kompas, 5/11/2021).