Anastasya Lavenia Yudi, Jakarta – The Indonesian Employers Association (Apindo) is concerned about the impact of the 2026 Provincial Minimum Wage (UMP) formula on the sustainability of labor-intensive industries. This comes after the government set the minimum wage with an alpha range of 0.5-0.9.
Apindo chair Shinta Kamdani said the lower 0.5 threshold is still quite high for the under-pressure labor-intensive businesses. "As we can see, industries like textiles, garments, these factories, they are still conducting layoffs," she told media crew at the Ministry of Finance building in Jakarta on Friday, December 19, 2025.
Shinta also cautioned that the provincial minimum wage policy may prompt companies to cut down their workforce, which would impact the number of job opportunities.
Nevertheless, employers are respecting the government's decision, she said.
Shinta also urged all parties to oversee the Regional Wage Council's decision in determining wage hikes in their respective regions. "But the process in each region must be safeguarded."
Meanwhile, the government believes that the UMP 2026 formula is the best formulation at present. Minister of Manpower Yassierli said the approach is intended to reduce regional disparities, as previous policies relied on a single uniform figure for all provinces.
"We believe this is the best formula we can produce at this time," Yassierli said when speaking to reporters at the Jakarta Creative Hub on Thursday, December 18, 2025.
According to Yassierli, the formulation of the 2026 UMP has accommodated workers' aspirations and was discussed with multiple stakeholders, including labor unions and business groups.
Regional governments have until December 24, 2025, to set provincial, district, and city minimum wages for next year, allowing them to tailor wage adjustments to local economic realities.
– M. Faiz Zaki contributed to the writing of this article