Ilona Estherina, Jakarta – The Confederation of All-Indonesian Trade Unions (KSBSI) welcomes the 6.5 percent increase in the Provincial Minimum Wage next year. KSBSI President, Elly Silaban, hopes that business owners will accept the decision announced by President Prabowo.
Elly stated that the 6.5 percent increase has undergone in-depth government studies, although it is slightly below KSBSI's desired 7 percent. "We respect the president's decision, and hopefully, the business sector can accept this," she told Tempo on Saturday, November 30, 2024.
The union also appreciates the government for not using Government Regulation No. 51/2023 as a reference for determining the wage calculation schemes, including the 2025 minimum wage. This is in line with the Constitutional Court (MK) ruling as stipulated in MK Decision Number 168/PUU-XXII/2024. "In general, this is good news," she said.
She hopes the decision will be implemented in setting the sectoral minimum wages handed over to provincial governments. According to the MK decision, governors must set sectoral minimum wages, which means the government is right to follow the decision.
When contacted separately, the Chair of the Manpower Sector of the Indonesian Employers Association (Apindo), Bob Azam, stated that businesses are still waiting for clarification from the government regarding the minimum wage increase. "We don't know the basis on which the government set it at 6.5 percent," he said.
He mentioned that he has not yet understood how wages will be determined in the future and how the business world will calculate the increase in labor costs. Furthermore, how to calculate the costs for business certainty. He also questioned the government's explanation regarding companies that cannot accommodate the increase and how wage disparities between regions will be handled.