Breaking News: Indonesian Trade Unions are fiercely opposing the proposed formula for the 2026 Provincial Minimum Wage (UMP)! This is a critical issue with the potential to impact millions of workers and the economic landscape of Indonesia. Let's dive in and understand what's at stake.
The Confederation of Indonesian Trade Unions (KSPI) has publicly rejected the Ministry of Manpower's and employers' approach to calculating the UMP increase for the year 2026. According to KSPI President Said Iqbal, the proposed regulations haven't included the labor unions in the discussion, which he called 'absurd.' This statement was made during a press conference on Sunday, November 9, 2025.
Here's the crux of the matter: The Ministry of Manpower, allegedly under pressure from employer associations, is designing a specific index for wage increases, ranging from 0.2 to 0.7. However, the wage increase in 2025 used a specific index of 0.9, and inflation and economic growth from 2024 to 2025 were not significantly different. This means workers could see a smaller increase than they received the previous year, despite similar economic conditions. The specific index is meant to reflect the labor's contribution to economic growth.
But here's where it gets controversial: The interpretation of this index was clarified in Constitutional Court Decision Number 168/PUU-XXI/2023, issued on October 31, 2024. Iqbal emphasizes that the index's value hinges on macroeconomic indicators like inflation and economic growth. He argues that a lower wage index would directly diminish purchasing power. Considering the inflation rate of only 2.86 percent in October 2025, he believes workers deserve a more substantial wage increase, suggesting a specific index between 0.9 and 1.0.
And this is the part most people miss: If the specific index is reduced, the Labor Party and KSPI are prepared to organize a national strike, involving five million workers, potentially halting production in over 5,000 Indonesian factories. This highlights the potential for significant disruption.
Meanwhile, the Director General of Industrial Relations and Social Security for Workers at the Ministry of Manpower, Indah Anggoro Putri, stated that no specific index figure has been agreed upon yet. Discussions on the UMP increase are still ongoing with the National Wage Council. The Indonesian Employers' Association (Apindo) has not yet commented on the issue.
Previously, Minister of Manpower Yassierli confirmed that the UMP will increase next year due to inflation, economic growth, and the cost of living, but the exact percentage is still undecided. He emphasized that the UMP increase will vary depending on the community's needs.
What do you think? Do you agree with the trade unions' stance, or do you see the employers' perspective? Share your thoughts in the comments below – let's get a discussion going!
