IDNEWSNOW.COM, Jakarta – Despite many objections, Manpower Minister Ida Fauziyah persisted with her circular letter No. 11/2020 in which asking governors to leave the 2020 provincial minimum wage unchanged in 2021.
Ida explained that the first reason was that many companies have been affected by Covid-19, causing them unable to pay employees’ salaries. “Even to just pay the current minimum salary,” said Ida in a meeting with the House or DPR’s Labor Commission on Wednesday, November 25, 2020.
Secondly, she cited a survey by Statistics Indonesia (BPS) in July 2020 that 82.85 percent of businesses tended to face a decline in revenue.
Besides, 53.17 percent of Medium and Large Enterprises and 62.71 percent of Micro and Small Enterprises (MSEs) dealt with financial constraints related to employees and operations.
“Indeed, some companies are not affected [by the pandemic], but most of them are affected,” she underlined.
The minister further explained that the circular letter was issued in consideration of the country’s economy amid the pandemic that grew -5.32 percent (year-on-year/yoy) in the third quarter of 2020.
The last reason, Ida Fauziyah went on, was that rules on wage stipulated in the Government Regulations (PP) and Ministerial Regulations were made in the assumption of normal conditions. So, she opined that forcing to increase the 2021 minimum wage would create problems in the hard, extraordinary time of Covid-19.
Read: Manpower Minister: Minimum Wage in 2022 to Follow Job Creation Law
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