Apindo Half Of Our Workforce Has Education Below Junior High School Level

Thursday, 14 Nov 2024

By deriz@insightinnews.com Business leaders emphasize the necessity of enhancing the quality of human resources and worker productivity in light of the government's plan to increase the minimum wage. According to Bob Azam, the Chairman of the Employment Sector of the Indonesian Employers Association (Apindo), raising wages will be quite challenging without a corresponding increase in productivity. "Half of our workforce has education levels below junior high school. This indicates that we need to improve their quality through training," he stated on Saturday, November 9. He elaborated that boosting productivity would create greater opportunities to raise wages without significantly impacting the prices of goods. Bob urged the government to conduct more worker training programs, particularly those focused on upskilling and reskilling. He noted that in several countries, workers typically receive training for an average of two weeks each year. He cited Singapore's government, which allocates budget and training facilities for workers over 40 years old seeking to enhance their skills. Meanwhile, the South Korean government also provides support and training facilities for workers aiming to transition to digital-based jobs. Structured training is deemed essential, as approximately 3 million individuals seek employment in Indonesia each year. Furthermore, it is estimated that around 20 percent of the current 100 million workers in Indonesia require upskilling and reskilling. In response to the plan for establishing the minimum wage for 2025, Bob expressed his hope that the government would prioritize the optimization of existing regulations, specifically Government Regulation Number 51 of 2023, rather than continuously issuing new regulations. He noted that frequent changes in regulations could create uncertainty, which may adversely affect investment and potentially lead to job losses. Indonesia, he emphasized, requires at least 3 million new jobs annually. The government is set to release a new regulation concerning the minimum wage for 2025 following the Constitutional Court's decision on the Job Creation Law. Coordinating Minister for Economic Affairs Airlangga Hartarto stated on Tuesday (November 5) that the content of the Minister of Manpower's regulation will align with the Constitutional Court's ruling regarding wage regulations, including the incorporation of the decent living standard (KHL) as a basis for determining the minimum wage. The formula for calculating the minimum wage has thus far been based on Government Regulation (PP) Number 51 of 2023, which amends PP 36/2021 concerning wages. There are three variables that form the basis for the increase in the minimum wage: inflation, economic growth, and a specific index. The deadline for establishing the provincial minimum wage (UMP) is November 21, 2024, while the deadline for the district/city minimum wage (UMK) is November 30, 2024.

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