Harumbi Prastya Hidayahningrum, Alfi Dinilhaq, Jakarta – The Manpower Ministry will bring in governors, mayors, and regents to discuss the country's new provincial minimum wage (UMP) formula for 2026, aiming to ensure that wage decisions reflect the varied economic realities across regions.
The move follows growing pressure from labor unions, employers, and several provincial administrations as the government attempts to balance worker welfare with investment stability.
Deputy Manpower Minister Afriansyah Noor said the government has been collecting input from both workers' groups and business associations ahead of formulating a revised wage regulation.
"The government under President Prabowo Subianto will certainly protect the rights of workers while ensuring businesses can continue to operate and invest in Indonesia," Afriansyah told Beritasatu TV on Friday.
A national meeting with regional leaders is scheduled for early next week to finalize the technical details behind wage adjustments, which will be tied closely to regional inflation levels.
"On Monday, we will invite all regional heads for discussions. Decisions at the provincial and district levels must reflect each region's inflation," he said.
Afriansyah urged all stakeholders to respect the ongoing deliberation process and deliver their aspirations constructively. While he did not specify the expected percentage increase, he confirmed that the final decision would be announced next week.
The Manpower Ministry is currently drafting a revised wage regulation that introduces additional variables designed to narrow wage disparities between regions while ensuring affordability for industries under global economic pressure.
"Some regions still have much lower wages than others. These new variables will account for the cost of living and other regional conditions," he said. He added that the formula must also protect labor-intensive sectors that remain vulnerable to external shocks.
The announcement of the 2026 provincial minimum wage was originally scheduled for Friday but was postponed as the government works to align the new formula with a recent Constitutional Court ruling. One contentious issue is the elimination of sectoral minimum wages (UMSP). After the court rejected labor unions' request to revive UMSP, the Indonesian Employers Association (Apindo) reiterated that sectoral wages were no longer relevant to the country's fast-evolving industries.
"Sectoral wages no longer match industrial developments. Many sectors have changed rapidly, and employers cannot continue bearing differing sectoral wage burdens," said Bob Azam, chair of Apindo's National Wage Council. He said performance-based pay structures were more appropriate than sector-based minimum wages.
Local governments urged to follow the rules
The Home Affairs Ministry has emphasized that regional governments must strictly follow the official formula when determining wages. Benny Irwan, director general of regional autonomy, said governors must not introduce additional components outside the formula.
"Local governments must comply with regulations. Wage decisions must be objective and legal," he said.
Several regions have already begun consultations with their wage councils. In Central Java, the council confirmed that the region would strictly follow the national formula and would not allow additional increases.
But workers argue that wages in Central Java remain too low. "The increases do not match daily living costs," said Rini, a factory worker.
Yogyakarta, which has the lowest monthly minimum wage in Indonesia at Rp 2.06 million ($123) in 2024, remains a contentious point. Workers continue to demand a substantial wage hike in the coming years.
"Wages in Jogja are too small and far from enough to live on," said Badri, a hotel worker.
Meanwhile, businesses in Yogyakarta urged the government to keep wage increases moderate, citing economic pressures in the tourism sector.
In South Sulawesi, labor unions are demanding a 10.5 percent increase, arguing that living costs have surged in Makassar. Employers strongly oppose the proposal.
"If wages rise by more than 10 percent, many companies will collapse," said a garment factory owner.
Industrial regions such as Bekasi, Serang, and Tangerang have also seen demonstrations rejecting the 3.5 percent wage increase proposed earlier. "A three percent increase is meaningless – it's only symbolic," said Suroto, a worker in Cikarang.
Home Affairs Minister Tito Karnavian explained earlier that the government delayed the wage announcement to ensure the new formula is evidence-based and reflects each region's economic structure. The government is also considering insights from Apindo, Kadin, and labor unions.