51% of Wage Workers Received Below the Minimum Wage in August 2021

The Central Statistics Agency (BPS) reported that 51.25% of laborers, employees, or staff received wages below the provincial minimum wage (UMP) in August 2021. This proportion is equivalent to approximately 25 million people.

BPS defines laborers/employees/staff as individuals who work for another person or institution/office/company permanently and receive wages/salaries in the form of money or goods.

Workers without a permanent employer are not classified as laborers/employees/staff but as independent workers. An individual is considered to have a permanent employer if they have had the same employer for the past month.

Before the pandemic, the proportion of laborers/employees/staff paid below the UMP was less than 50%.

However, after Indonesia was hit by the Covid-19 pandemic, the proportion began to increase to 50.9% in August 2020, and further increased in August 2021, reaching the highest level in the last three years.

Several provinces also recorded average wages below the UMP.

Jakarta, for example. The average wage of laborers/employees/staff in the capital city in August 2021 was recorded at Rp4.42 million, 8.77% lower than the UMP applicable during that period.

In April 2022, the government planned to provide wage subsidy assistance (BSU) of Rp1 million to 8.8 million workers with salaries below Rp3.5 million.

This planned BSU distribution is intended as an effort to support pandemic recovery and ease the burden on the community from the increase in the price of several basic necessities that occurred since the beginning of 2022.