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The increase in the Provincial Minimum Wage (UMP) for 2023 is being discussed between employers and workers. Deputy President Director of PT Pan Brothers Tbk Anne Patricia Sutanto said the government needs to be consistent with the implementation of Government Regulation (PP) No. 36 of 2021 concerning Wages. "We are guided by the Government needing to be consistent with PP 36 of 2021. In accordance with what has been conveyed by the Ketum APINDO," he told CNBC Indonesia, Monday (21/11/2022). APINDO said, if there is a change in the substance of PP 36 of 2021, this will show the government's uncertainty in carrying out fundamental structural reforms of the Indonesian economy.

APINDO Chairperson Hariyadi B. Sukamdani said, with the plan to stipulate a new formulation in calculating the 2023 UMP/UMK increase, it means that the government is annulling the joint efforts that were driven by the government itself in drafting the Job Creation Law which had been carried out with extraordinary efforts.

"If this is done, the labor-intensive sector, MSMEs and job seekers will suffer," he said.

According to him, labor-intensive sectors such as textiles, garments, footwear, and others will again experience difficulties in fulfilling compliance or compliance with formal legal provisions because they do not have the ability to pay.

Likewise with MSME business actors who will force them to run their business informally so that they do not get support from government programs and limited market access.

Meanwhile, job seekers will find it difficult to find work and the waiting time will be longer to get a decent formal job, given the small number of jobs created due to an uncompetitive wage system.

"The government must consider the need for job creation which has become increasingly difficult in the last 7 years where based on BKPM data, every 1 trillion investment is currently only able to absorb a third of the number of jobs created compared to the previous 7 years," he said.

Apart from that, he continued, the government also needs to pay attention to the fact that 96 million people are financed by the BPJS Health contribution by the central government and 35 million are funded by local governments because they fall into the poor category due to not having a decent job.

In order for Indonesia to be more competitive in terms of job creation, APINDO urges that in determining the 2023 UMP/UMK the government fully complies with the provisions of laws and regulations, namely Law (UU) No. 13 of 2003 concerning Manpower and its amendments to the Job Creation Law (UU) No. 11 2020, as well as Government Regulation (PP) No. 36 of 2021 concerning Wages in setting the UMP/UMK, namely by following along with the global economic downturn in 2023," he added.