[Indonesia] Zero per cent increase predicted for Jakarta’s minimum wage in 2021

The Indonesian Indigenous Entrepreneurs Association (HIPPI) has predicted that Jakarta’s provincial minimum wage (UMP) for Jakarta will not increase in 2021, in the wake of the COVID-19 related economic slowdown, The Jakarta Post reports.

In an October 21 written statement (quoted by kompas.com) HIPPI chairman Sarman Simanjorang said, “With data on economic growth and inflation in 2020, the increase in UMP in 2021 is estimated at zero per cent.” 

Mr Simanjorang said a zero increase in UMP would be reasonable, considering that many small and medium businesses had closed and their employees been laid off, employers’ cash flow had been affected and public purchasing power had weakened. 

An increase in UMP would only make the situation worse for entrepreneurs facing the outbreak, Mr Simanjorang said. “The burden on entrepreneurs is already big, so being able to survive the pandemic is already a blessing. If the UMP is raised, it will seriously hit entrepreneurs.” 

The International Monetary Fund (IMF) has predicted that Indonesia’s gross domestic product (GDP) will shrink by 1.5 per cent this year. The IMF projection is largely in line with the government’s estimate for a full-year contraction of 0.6 per cent to 1.7 per cent made in late September, down from GDP growth of 5.02 per cent in 2019.  

In August Manpower Minister Ida Fauziyah said that around 3.5 million workers had been laid off or furloughed as a result of the COVID-19 pandemic.

The Indonesian Indigenous Entrepreneurs Association (HIPPI) has predicted that Jakarta’s provincial minimum wage (UMP) for Jakarta will not increase in 2021, in the wake of the COVID-19 related economic slowdown, The Jakarta Post reports.

In an October 21 written statement (quoted by kompas.com) HIPPI chairman Sarman Simanjorang said, “With data on economic growth and inflation in 2020, the increase in UMP in 2021 is estimated at zero per cent.” 

Mr Simanjorang said a zero increase in UMP would be reasonable, considering that many small and medium businesses had closed and their employees been laid off, employers’ cash flow had been affected and public purchasing power had weakened. 

An increase in UMP would only make the situation worse for entrepreneurs facing the outbreak, Mr Simanjorang said. “The burden on entrepreneurs is already big, so being able to survive the pandemic is already a blessing. If the UMP is raised, it will seriously hit entrepreneurs.” 

The International Monetary Fund (IMF) has predicted that Indonesia’s gross domestic product (GDP) will shrink by 1.5 per cent this year. The IMF projection is largely in line with the government’s estimate for a full-year contraction of 0.6 per cent to 1.7 per cent made in late September, down from GDP growth of 5.02 per cent in 2019.  

In August Manpower Minister Ida Fauziyah said that around 3.5 million workers had been laid off or furloughed as a result of the COVID-19 pandemic.