News Forum - Indonesia increases Jakarta’s minimum wage for next year

[Thaiger]

Indonesia has decided to raise Jakarta’s provincial minimum wage (Upah Minimum Provinsi) starting in 2022 as its economic growth is predicted to reach 4.3% at the same time. The decision was made for the benefit of the community, especially employees from various departments who were targeted by the impact of the Covid-19 outbreak, according to Deputy Governor Ahmad Riza Patria. He stated that the financial burden on workers during a pandemic can be reduced by increasing UMP, although it will not satisfy everyone, adding that “it is for the common benefit.” According to Governor Anies Baswedan, Jarkata’s UMP will be increased […]

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[spicy_girl]

Most people are working in informal economy, sad but no increase there.

[King Cotton]

30 minutes ago, spicy_girl said:

Most people are working in informal economy, sad but no increase there.

'Informal economy'? . . . like working at the shop, next door, or the scooter repair shop, across the street . . . neither employed nor unemployed but beyond the scope of state provisions?

[spicy_girl]

7 minutes ago, King Cotton said:

'Informal economy'? . . . like working at the shop, next door, or the scooter repair shop, across the street . . . neither employed nor unemployed but beyond the scope of state provisions?

Kind of, yes. And all the sellers and trading people making their own business. No tax, no reporting, all in cash money. I guess it’s similar in Thailand?

[King Cotton]

1 minute ago, spicy_girl said:

Kind of, yes. And all the sellers and trading people making their own business. No tax, no reporting, all in cash money. I guess it’s similar in Thailand?

Absolutely! My wife reckons there won't be single tax payer in the village, but every household has a cash wage earner or two . . . enough to keep the bread rice on the table and gas in the scooter .

[spicy_girl]

13 minutes ago, King Cotton said:

Absolutely! My wife reckons there won't be single tax payer in the village, but every household has a cash wage earner or two . . . enough to keep the bread rice on the table and gas in the scooter .

Same in my mother’s village. Nobody is paying tax. The minimum wage increase is good news for government workers, teachers or staff of chain and brand companies. For regular people, I think very small effect or no effect at all. Actually bad news for poor people in East Jakarta and Surabaya because minimum wage increase will discourage the foreign investment. So less real jobs available in the near future.

[BigHewer]

Minimum wage should always be a safety net and no more, not a mechanism used by liberals to drive wages higher. The economy suffers and investment stagnates.

Look at Australia, highest minimum wage in the world I believe (though I may be wrong). How many car factory jobs lost there in the last 30 years?

Forcing up the minimum wage is not the answer to lifting folks up out of poverty.

[King Cotton]

56 minutes ago, BigHewer said:

Forcing up the minimum wage is not the answer to lifting folks up out of poverty.

Forcing-up efficiency and its resultant production per working-day gains would be top of my priority list, both at a corporate and national level, given the right people calling the shots.

[BigHewer]

19 minutes ago, King Cotton said:

Forcing-up efficiency and its resultant production per working-day gains would be top of my priority list, both at a corporate and national level, given the right people calling the shots.

Forcing up efficiency yes, loosening market entry regulations and lowering corporate tax a big yes too.