Muhammad Hanri at TNP2K Webinar, Wage Subsidy Assistance during the COVID-19 Pandemic: Learning and Socialization
Rifdah Khalisha – Public Relations FEB UI
DEPOK – (19/8/2021) Anwar Sanusi as Secretary General of the Ministry of Manpower (Kemnaker), presented data from the Ministry of Manpower that were collected from various provinces in Java and Bali during the COVID-19 pandemic. The data shows that of the total workers in the categories of critical, essential, and non-essential sectors, 24.66% of workers or laborers have the potential to be laid off and 23.72% have the potential to be laid off.
On the basis of this problem, the government intervened by providing social assistance, including the 2021 wage subsidy assistance (BSU), to mitigate the impact of the pandemic on the employment sector.
“From this fact, of course, the government needs to intervene so that we can avoid these negative potentials, or at least we can reduce them. Either through government assistance or other social assistance, so that companies and workers can still carry out the production process.” Anwar said.
However, the implementation of the 2021 BSU has a number of differences with the 2020 BSU. The first difference is in terms of coverage. BSU 2020 targets all regions in Indonesia affected by the pandemic, while BSU 2021 only targets areas with PPKM level 3 and level 4 according to Minister of Home Affairs Instruction Number 22 of 2021, and Minister of Home Affairs Instruction Number 23 of 2021.
Second, the wage limit for BSU recipients. The maximum wage for BSU in 2020 is 5 million rupiah, while the maximum wage for BSU in 2021 is 3.5 million rupiah or according to the municipal minimum wage (UMK) or provincial minimum wage (UMP) rounded up, up to hundreds of thousands for areas with UMP or The UMK is above 3.5 million rupiah.
Third, the Ministry of Manpower is also trying to distribute the 2021 BSU more on target by implementing a clear signal from the regulatory side and clean condition from the data side. This is because BSU will provide social support, especially for workers who are affected by the policy of the Implementation of Community Activity Restrictions (PPKM).
Muhammad Hanri, Head of the Study Group on Social Protection and Employment, LPEM FEB UI in the TNP2K webinar, “Wage Subsidy Assistance during the COVID-19 Pandemic: Learning and Socialization on Thursday (19/8)” explained that the condition of Indonesian workers in the midst of the pandemic experienced decrease in working hours and wages during the period of February 2020 to February 2021.
Until 2021, the government will provide support for Micro, Small and Medium Enterprises (MSMEs) by allocating a National Economic Recovery (PEN) budget of Rp 162.40 trillion through various stimuli.
However, Indonesia’s BSU distribution approach is different from other countries, such as Australia, the UK, and Canada. Those countries run similar programs, but aim to maintain the demand side in the labor market, namely companies. Their governments pay a portion of the workers’ wages so companies don’t have to fire employees.
“Meanwhile in Indonesia, the government focuses from the supply side. This is a little different, both in terms of the amount and in terms of subsidies.” he added.
For him, the amount of wage subsidies in Indonesia is still relatively small compared to other countries, which ranges from 50 to 80 percent of normal wages. Abroad, entrepreneurs submit information on BSU recipients. Meanwhile in Indonesia, it is hoped that entrepreneurs will be more actively involved in submitting recipient data and applying for BSU subsidies.
“The amount of this wage subsidy will likely not have much impact on the economy in general. However, the value will still have an impact on the recipient. The BSU program is useful in maintaining the consumption level of affected workers, because the public reduces spending as a coping mechanism due to being affected by the pandemic. In addition, the use of assistance is in accordance with the program’s objectives because it is able to meet the basic needs of the recipients and pay for utility costs.” concluded Hanri. (hjtp)
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