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Labor union leader predicts Eid bonuses to reach Rp 129 trillion

Jakarta Globe - March 27, 2024

Prisma Ardianto, Jakarta – The Secretary General of the Indonesia Workers' Organization (OPSI), Timboel Siregar, forecasts that overall Eid al-Fitr bonuses (THR) for this year will range from approximately Rp 129.2 trillion ($8.14 billion) to Rp 165 trillion.

This THR amount is divided into two main segments. Firstly, there is Rp 48.7 trillion allocated for civil servants, military personnel, police officers, and their pensioners, as announced by the government on March 22.

Secondly, around Rp 80.5 trillion is designated for private formal sector workers, based on an assumption of approximately 23 million workers receiving an average THR of Rp 3.5 million each.

Timboel emphasized that his calculation does not include March 25 or April 1 monthly wages or savings of private workers and civil servants, which could also contribute to holiday expenses. Eid bonuses are typically equivalent to one month's basic salary and are given in full a week before Eid.

However, this THR estimation does not encompass potential bonuses for other worker segments. With Indonesia's total working population estimated at 139.85 million people, covering 57.18 million workers, there remains a significant workforce not factored into this calculation.

Expanding the calculation to encompass the entire private worker segment, which includes around 47 million individuals, with an assumed THR of Rp 3.5 million per person, would yield a total THR value of approximately Rp 165 trillion.

"The increase in aggregate consumption by the public will support economic growth. Aggregate consumption contributes about 52 percent to economic growth, and therefore THR will also support economic growth," explained Timboel.

Timboel calls for the Manpower Ministry to enforce THR payment laws, particularly in the private sector. He underscores the importance of THR in supporting worker welfare during the holidays and driving increased public consumption, which in turn fuels economic growth, job creation, and tax revenue.

Timboel proposes advancing THR payments for formal private workers to two weeks before Eid al-Fitr, aligning with the timing of civil servants, military personnel, and police officers. This, he believes, would expedite the circulation of THR funds, further stimulating economic activity.

With Ramadan approaching and the subsequent preparations for Eid al-Fitr, Timboel notes the anticipated rise in consumption driven by increased demand for essential goods and services during this period. He emphasizes that THR serves to balance the surge in needs with potential price hikes, thereby maintaining and potentially enhancing the purchasing power of workers and their families.

Source: https://jakartaglobe.id/business/labor-union-leader-predicts-eid-bonuses-to-reach-rp-129-trillio