Sultan Abdurrahman, Jakarta – The Labor Party and the Indonesian Trade Union Confederation (KSPI) are taking to the streets on Friday, December 19, to reject the formula for calculating the 2026 provincial minimum wage (UMP). The protest is set to take place scheduled to take place around the Presidential Palace in Jakarta.
Labor Party president, who is also the leader of KSPI, Said Iqbal, said the government's latest UMP formulation fails to address workers' needs. "The demonstration will voice our rejection of the Government Regulation on Wages," he said on Thursday. "And the unsatisfactory minimum wage determination."
The regulation, Said mentioned, could remain effective for years to come once Prabowo signs it. But the government never engages in comprehensive discussions about it with the workers' unions.
The standardized approach for wage determination follows the newly established national directive: inflation + (economic growth x alpha). For the upcoming year, the central government has set the alpha coefficient range between 0.5 and 0.9.
The specific alpha value within this range will be determined at the local level, with the final calculation dictating the percentage of the UMP increase for each province.
Said said an alpha value of 0.9 aligns with the Labor Party's proposal and welcomed the government's decision to allow regions to adopt an index as high as that level. However, he criticized the lower limit of 0.5, calling it insufficient to protect workers' purchasing power.
The Labor Party president estimated a 4 to 6 percent minimum wage hike next year, lower than the previous year's 6.5 percent.
According to Said, tens of thousands of workers have agreed to protest the UMP determination across several regions, from Jakarta, West Java, and Banten.
Minister of Manpower Yassierli said the government chose an adjustable alpha index to reduce regional disparities, noting that previous policies applied a single figure nationwide.
"We believe this is the best formulation we can produce at this time," he said after an event at the Jakarta Creative Hub on Thursday.
Yassierli also said the government had demonstrated its commitment to workers, citing a 6.5 percent increase in the minimum wage last year, housing assistance for more than 200,000 people, and wage subsidies for 15,000 workers.
– M. Faiz Zaki contributed to the writing of this article