Indonesia’s capital, Jakarta, is to increase minimum wages next year for select businesses, despite a government advisory to keep pay unchanged to avoid further job losses during the COVID-19 pandemic.
The minimum wage is to rise by 3.27 percent to 4.42 million rupiah (US$302) next year for workers in businesses less affected by the pandemic, Jakarta Governor Anies Baswedan said.
The condition is that they should be able to operate as usual and help support economic growth in the city, he said in a statement late on Saturday.
Businesses affected by the pandemic can submit a request to the local employment agency to have the increase waived.
Jakarta joined Central Java and Yogyakarta provinces in raising wages, despite a central government circular to governors issued on Tuesday last week to maintain the wages at current levels.
ANNUAL CONTRACTION
Indonesian Minister of Manpower Ida Fauziyah said the wage freeze was intended to help keep businesses afloat as the country faces its first annual economic contraction since the Asian financial crisis.
The government calculates minimum wage increases based on inflation and economic growth, while accounting for living costs in each province under current regulations.
This year, the minimum wage has been raised by 8.51 percent.
West Java, which is Indonesia’s most populous province and home to various industrial estates, would not raise wages, according to a statement on the administration’s Web site.
Indonesian President Joko Widodo has made labor reform an economic priority and parliament has passed a jobs bill to boost investment.
However, the law has triggered protests by labor groups, with the latest scheduled for today. Unions are calling for next year’s minimum wage to be increased by 8 percent.
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