The Indonesian Employers Association (Apindo) shared on Wednesday its support for the government’s plan to increase the provincial minimum wage by 8.25 percent next year, as long as the government stayed consistent during the implementation process.
The powerful business lobby group said it considered the figure “fair”, as it was calculated in accordance with the formula stipulated in Government Regulation (PP) No. 78/2015. The regulation stipulates annual wage increases must take into account gross domestic product (GDP) growth rates and the current fiscal year’s inflation.
“PP 78 was issued last year through consultation with Apindo and other stakeholders. We support the plan and hope the government is consistent in executing it,” Apindo deputy chairman Shinta Widjaja Kamdani told The Jakarta Post.
Shinta said the government needed to ensure all provincial administrations complied with the recommended figure, instead of making their own decisions.
“For example, the South Sulawesi provincial administration has raised the 2017 UMP[provincial minimum wage] by 11 percent, which is higher than the figure we have agreed to,” she said.
The government has set Nov. 1 as the deadline for all provincial administrations to submit their final minimum wage for their respective regions.
Anton J. Supit, another Apindo executive, also stressed the importance of regional administrations’ compliance with the standardized minimum wage increase level.
“During unfavorable economic times and high unemployment, [policy] consistency would help maintain a strong investment climate,” he said.