Indonesian employers group says proposed minimum wage rise is too high
People walk beside a mural depicting wings with a background of office buildings and apartments in Jakarta, Indonesia, on May 20, 2024. (File photo: Reuters/Ajeng Dinar Ulfiana)
JAKARTA: Indonesia's provincial minimum wage would rise by 5.3 per cent to 7.3 per cent next year under a new government rule, an increase that businesses think is too high, an official at the country's employers association APINDO said on Wednesday (Dec 17).
On Tuesday, the manpower ministry outlined a new wage formula that includes inflation, economic growth and the contribution of labour to growth as inputs.
The average provincial minimum wage rise this year was 6.5 per cent, with the average minimum wage at about 3.3 million rupiah (US$198), ministry data shows.
"We consider that it's too high. Many companies couldn't even meet the minimum wage for this year," Bob Azam, APINDO's head of labour affairs, told Reuters.
Using the ministry's new rule, provincial governors have until Dec 24 to set the next year's wage increase for their region.
The Labour Party, which represents unions, had sought an increase of at least 6.5 per cent given the rate of economic growth this year. The party will release its response to the pay rule later on Wednesday, Chairman Said Iqbal said late on Tuesday.
