The increase in the average national minimum wage in 2022 will be around 1.09 percent, and for those workers employed over a year less than 3 percent, below the inflation rate. The decline in workers’ wages below the inflation rate will inevitably reduce workers’ purchasing power.
The weakening of workers’ purchasing power will continue in coming years if the Government insists on the regional Government (Governors) applying Government Regulation No. 36 of 2021, Article 26 paragraph (5), which states the regulations on establishing a minimum wage are to increase: at around 0.5 percent.
The staple price increase will impact all workers in both informal and formal sectors, and the juxtaposition of purchasing power will affect economic growth. Our economic growth posture is still highly dominated and contributed by spreading mass consumption.
The 2022 BSU (wage subsidy) program is well-appreciated; as the Manpower Minister conveyed, the wage subsidy is expected to support workers’ buying power and stimulate economic growth.
Many elements will contribute to the wage subsidy program’s success, one of which is to learn from its predecessors in implementing the 2020 and 2021 BSUs. The Government is advised to expand the range of its wage subsidy recipients, not only limited to the formal workers who are registered in BPJS Ketenagakerjaan.
Other much-needed wage subsidy recipients within the target recipients to the current 2022 BSU must have included unpaid laid-off workers, BPJS Ketenagakerjaan unregistered workers, BPJS Ketenagakerjaan registered workers with employers in contribution arrears, online-based workers such as online bike riders, malls’ shopkeepers, returning home laid-off migrant workers and other types of workers. The above workers have received no wage subsidies from the previous 2020 and 2021 BSUs, which means the Government continues to discriminate against workers in general.
The current 2022 BSU will be endowed to workers with wages below IDR 3.5 million who are actively registered in BPJS Ketenagakerjaan— being actively registered means they still earn the monthly salaries and pay contributions to BPJS Ketenagakerjaan.