JAKARTA: A major Indonesian labour coalition is demanding an 8.5% to 10% increase in the minimum wage for next year, higher than the 6.5% hike set by President Prabowo Subianto for this year.
The Coalition of Trade Unions and the Labour Party (KSP-PB) said that the union’s demand is based on Constitutional Court Decision No. 168/2023, issued last year.
The landmark ruling emphasised that wage determination must account for the necessity of a decent living.
“We are basing this on the Constitutional Court’s (MK) decision, which stated that a minimum wage increase must consider the need for a decent living, using a formula that takes into account inflation, economic growth and certain indices,” Labour Party president Said Iqbal said during an online press conference on Monday.
He explained that the inflation rate over the past 12 months was between 3% and 3.26%, while the economy grew by 5.2% during the same period.
Furthermore, he argued that the specific index should increase from 0.9 to 1% due to the government’s claim of reduced poverty and unemployment.
“So, by adding 5.2% (economic growth) and 3.26% (inflation), we get 8.46%, rounded up to 8.5%. This is in line with the MK ruling,” he said.
Manpower Minister Yassierly confirmed that the government is currently developing the concept and conducting a study for the planned wage hike next year, noting that discussions with various stakeholders are ongoing.
“Please wait. The stipulation for determining the provincial minimum wage is usually made on Nov 1, and Dec 1 for regencies or cities.
“There is still time to discuss and wait for direction from President Prabowo,” he said on Monday.
The Indonesian Employers Association has urged the government to refer to the previous formula when determining next year’s wage increase.
The association said this formula also takes into account the inflation rate, economic growth and relatively lower indices, the latter of which is still under discussion at the National Wage Council. — The Jakarta Post/ANN
