Manpower Minister Hanif Dhakiri has proposed an 8.13 percent rise in the provincial minimum wage (UMP) for 2019, saying an increase of that amount was based on data issued by Statistics Indonesia (BPS) on inflation of 2.88 percent and economic growth of 5.15 percent.
“We hope that all governors will soon [adopt] the new provincial minimum wage,” said Hanif at the Presidential Palace in Jakarta on Tuesday, adding that he had informed the governors about the proposal through circulars.
Governors have the authority to make decisions on the UMP after taking into account the aspirations of both employers and employees.
He also called on the trade unions to accept the government’s proposal, because, according to Government Regulation No. 78/2015, the UMP had to be decided by considering the inflation rate and economic growth.
“So the workers do not need to hold demonstrations. We can do without the uproar,” the minister added.
However, the Indonesian Workers Confederation (KSPI) rejected Hanif’s proposal, demanding instead that the UMP be raised by 20 percent to 25 percent.
Meanwhile, the Indonesian All Workers Organization (OPSI) said it could understand the proposal of a single-digit UMP increase, because of the economic conditions and the weakening rupiah.
“In a situation where it’s difficult for companies to move, an increase of 8.03 percent is enough for workers,” he added.