The Indonesian Minister of Manpower Indonesia’s Ministry of Manpower has issued a memorandum to the Nation’s Provinces and Special Regions regarding minimum wage levels in 2021. In that memo (Surat Edaran Nomor M/11/HK.04/2020) on the stated subject of minimum wages for 2021 in a time of COVID-19, the Government has declared that minimum wage levels will not increase in 2021.
As reported by Kompas.com, the Ministerial Memorandum states: “In consideration of the condition of the Indonesian economy during the Covid-19 pandemic and the need for national economic recovery, the Governors are asked to set the value of the 2021 Minimum Wage at the same level of the 2020 Minimum Wage.”
The Minister of Manpower signed the Ministerial decree on 26 October 2020. It is expected that the Nation’s Governors will issue formal decrees regarding their respective minimum wage levels on 31 October 2020, announcing levels that will mirror the 2020 rates.
Earlier, the Confederation of Indonesian Workers Unions (KSPI) had issued their demand that minimum wage levels increase in 2021 by 8%. In making their demand, the KSPI threatened that a failure to increase wages would result in wide-scale workers’ demonstrations and a battle to reject the Omnibus Labor Law (UU Cipta Kerja).
The President of KSPI, Said Iqbal, said his membership rejects business circles’ requests that there should be no increase in the minimum wage in 2021. In his judgment, the economy’s negative growth during the COVID-19 Pandemic is not a valid reason to delaying an increase in wage levels. Continuing, Iqbal argued that if minimum wages do not increase, then the national economy will suffer as the purchasing power of the public would decrease, resulting in lower consumptions of goods and services.