Indonesia provides wage subsidies to lower-income workers

This year’s Wage Subsidy Assistance (BSU) will focus on Indonesian workers with salaries below Rp3.5 million (US$243).
By: | April 8, 2022

Manpower Minister Ida Fauziyah, who announced this decision in a press statement, said, “This BSU aims to protect and maintain the workers’ economic welfare and improve people’s purchasing power as a tool to increase our economic growth.”

The minister said though the number of positive cases and death rates due to COVID-19 in Indonesia had decreased significantly, the impact of the pandemic on the economy was still being felt.

In addition, the Russian-Ukrainian conflict and the dynamics of global politics also affected the global economic recovery and had an impact on global inflation. The consequent rising commodity and energy prices have put pressure on Indonesia’s economic recovery that affected the employment conditions.

The Ministry of Manpower had distributed BSU in previous years. The BSU in 2020 was focused on workers with monthly wages below Rp5 million (US$347), while last year’s BSU targeted workers earning below Rp3.5 million (US$243). If the area’s minimum wage was higher than the amount, the applicable minimum wage limit was used.

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For this year’s BSU, the government has budgeted Rp8.8 trillion (US$612 billion) to allocate assistance of Rp1 million (US$70) per recipient. “The details of the criteria and mechanism for the 2022 BSU are being discussed by the Ministry of Manpower,” Fauziyah said.

Currently, the ministry is preparing all policy instruments for implementing the 2022 BSU to ensure that the programme runs quickly, precisely, accurately, and with accountability, according to Antara News.