Optimistic with Economic Growth in 2022, Jakarta Government Raises UMP 2022 by 5.1 Percent

Based on study by Bank Indonesia that the projection of Indonesia's economic growth in 2022 is 4.7% to 5.5%, inflation will be controlled at 3% (2-4%) and the projection of the Institute for Economic and Financial Development (Indef) which projects Indonesia's economic growth rate in 2022 by 4.3%, the Governor of DKI Jakarta Province Anies Baswedan took decision to revise and increase the provincial minimum wage (UMP) in 2022 to Rp 4,641,854.

We assess this 5.1% increase as a feasibility for workers and still affordable for employers

The UMP for Jakarta in 2022 rose 5.1% or Rp 225,667 from UMP in 2021.

This decision, apart from taking into account of positive sentiments of the study and projections, is also based on review and re-discussion with all relevant stakeholders as well as the attitude of prudence in the midst of Jakarta's rapid economic growth.

Meeting Workers, Anies: Letter Regarding UMP 2022 Has Been Sent to Ministry of Manpower

"With an increase of Rp 225 thousands per month, the workers can use it as an addition to their daily needs. What is more important is that through this decent UMP increase, we hope people's purchasing power will not decrease," he said, Saturday (12/18), as quoted from Jakarta PPID Press Release.

He emphasized that the decision to increase Jakarta UMP upholds the principle of justice for workers, companies, and Jakarta Government. As an illustration, in years before COVID-19 pandemic, the average increase in Jakarta's UMP for the last 6 years was 8.6%.

"We assess this 5.1% increase as a feasibility for workers and still affordable for employers. It also increases people's purchasing power. It is a form of appreciation for workers and also enthusiasm for boosting the economy and business. We hope in the future, the economy can grow faster for the good all of us," he mentioned.

Supporting Data for the Increase of Jakarta UMP in 2022

Based on data from Jakarta Central Statistics Agency (BPS), the average inflation in Jakarta in January-November 2021 reaches 1.08% with average national inflation of 1.30%. In the last 6 years (2016-2021), the average increase in Jakarta's UMP taking into account the value of economic growth and national inflation is 8.6%.

On November 22, 2021, Governor Anies sent letter no. 533/-085.15 about Proposal for Reviewing Provincial Minimum Wage (UMP) 2022 Determination Formula to the Minister of Manpower. In the letter, he said that the increase in UMP 2022 in Jakarta which previously was only Rp 37,749 or 0.85% is still far from feasible and doesn't fulfill the principle of justice. This is due to increase in living needs of workers as seen from inflation in Jakarta.

In reviewing UMP 2022, Jakarta Government used inflation variable (1.6%) and national economic growth variable (3.51%). From two variables, 5.11% is the figure for the increase in UMP 2022.

In line with UMP determination, Jakarta Government is trying to improve workers welfare and reduce cost of living for workers by providing policies in form of transportation service assistance, provision of cheap food, and personal education cost for workers' families.