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Employers, workers still locked horns over 2023 minimum wage
Nearing the end of the year, employers and workers have yet to reach an agreement on the 2023 minimum wage hike as both sides differ on the factors used to reach the final figure.
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Protesters gather to show their displeasure at a gasoline price hike, outside of the House of Representatives building in Jakarta on Sept. 6.
(AFP/Azwar Ipank)
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earing the end of the year, employers and workers have yet to reach an agreement on the 2023 minimum wage increase as both sides differ on the factors used to reach the final figure.
According to the Indonesian Chamber of Commerce and Industry (Kadin), next year’s wage increase demanded by labor unions was unrealistic as it was calculated using “their own assumptions”.
Labor unions have called relentlessly for a minimum wage increase of around 13 percent, as September’s fuel price hike had greatly impacted living costs in other sectors of the economy such as food and rent prices.
“[It] is very unlikely [the demand be met]. I don’t think the business world will be able to withstand it [if the unions’ proposed 13 percent minimum wage hike was implemented],” Kadin deputy chairperson for manpower Adi Mahfudz Wuhadji told reporters on Tuesday.
Also serving as National Wage Council (Depenas) deputy chairperson, Adi stated that despite not being the ultimate factors that determined the formulation of the minimum wage, annual GDP growth and headline inflation remained important parts of the calculation.
These two components are listed in Government Regulation No.36/2021 on remuneration, a byproduct of the Job Creation Law, and he asked the Manpower Ministry to follow this rule.
Other lesser factors, he continued, included consumer consumption, family-wide consumption, the purchasing power of laborers within families and the number of workers in families.
