Hendrik Yaputra, Jakarta – President Prabowo Subianto has agreed to a proposal that the 2026 minimum wage will not be set as a specific, fixed figure but will instead be presented as a range.

Minister of Manpower, Yassierli, confirmed the decision after a limited meeting with the President and ministers at the Presidential Palace in Central Jakarta on Thursday, November 27, 2025.

"A single figure does not solve the problem of disparity. That's why we proposed a range, and Prabowo agreed to that," Yassierli said.

The new range scheme is designed to give regional governments the option to determine the final minimum wage amount. This approach is in line with the Constitutional Court (MK) Decision Number 168 of 2023, which grants each Regional Wage Council the authority to propose the minimum wage increase to the Governor.

Under this scheme, the central government will issue guidelines in the form of a minimum wage range. Regional governments will then determine a suitable amount from this range based on their specific economic growth conditions, inflation rate, and the local cost of living.

"We provide guidelines in the form of a range. Later, regional governments will determine it themselves," Yassierli explained. The Ministry of Manpower expects this new structure to help narrow the wage disparity between regions.

Yassierli confirmed that the ministry has formed a team to calculate the estimated decent standard of living to support this new formula.

Indah Anggoro Putri, Director General of Industrial Relations and Social Security for Workers at the Ministry of Manpower, clarified that the intended range in the calculation is related to the alpha index.

The alpha index is a variable representing labor's contribution to the economic growth of a province or district/city. It functions as a multiplier in a province's or city's economic growth before being added to the inflation rate.

While the core minimum wage formula remains the same as stipulated in Government Regulation Number 51 of 2023, the adjustment involves expanding the alpha index beyond its previous range of 0.1-0.3. This adjustment is necessary to comply with the Constitutional Court's directive to include the decent standard of living aspect in the minimum wage calculation.

Indah assured that the minimum wage for 2026 will still take effect on January 1 next year, even though the typical announcement date of November 21, 2025, has passed. She claimed the drafting of the necessary Government Regulation (PP) is nearing completion and has been discussed with relevant ministries/agencies, labor unions, and employers.

– Anastasya Lavenia Yudi contributed to this report

Source: https://en.tempo.co/read/2069218/prabowo-approves-new-minimum-wage-scheme-a-range-not-a-fixed-figur