“There is certainly no concept of wages being lowered. If economic growth is negative, the Regional Wage Council will still consider increases based on inflation,” Yassierli said during a meeting at the Ministry of Manpower office here on Wednesday.
He explained that the wage increase formula is inflation + (Economic Growth x Alpha), with an Alpha range of 0.5–0.9 points. This ensures wages will continue to rise even if a region records negative economic growth.
According to data from Statistics Indonesia (BPS), two provinces experienced negative economic growth in the third quarter of 2025: West Papua (-0.02) and Central Papua (-4.74).
“We are confident that the Regional Wage Council has the data and understands when economic growth is high, what drives it, and which sectors dominate,” Yassierli said.
He also provided training to the Regional Wage Councils regarding minimum wage determinations in their respective regions.
Previously, President Prabowo Subianto signed a government regulation on minimum wage increases, introducing the new formula of inflation + (Economic Growth x Alpha) with Alpha ranging from 0.5–0.9 points.
The regulation increases the Alpha range from the previous Government Regulation No. 51 of 2023, which set it at 0.1–0.3 points under Article 26 paragraph (6).
Yassierli urged governors to set the minimum wage increases no later than December 24, 2025.
Under the new regulation, governors are required to determine the provincial minimum wage (UMP) and may set district/city minimum wages (UMK), as well as provincial sectoral minimum wages (UMSP) and optionally sectoral wages for districts/cities (UMSK).
“We hope that the wage policies in this regulation become the best solution for all parties,” he added.
Related news: Govt waiting for right moment to announce minimum wage: Dy Minister
Related news: Dy Minister discusses new minimum wage formula with labor unions
Related news: Indonesia to base 2026 minimum wage formula on decent living standards
Translator: Putu, Kenzu
Editor: Azis Kurmala
Copyright © ANTARA 2025
