Minimum Wage in Indonesia Set to Rise 6.5% in 2025: Effects on Labour and Businesses

President Prabowo Subianto announced a 6.5% increase in the national minimum wage by 2025.

“More detailed provisions regarding the minimum wage will be regulated by a Minister of labour Regulation,” Prabowo said on Friday, November 29, 2024.

So, what is the impact of the 6.5% minimum wage increase for workers and industry?

Apart from being related to welfare, the policy can also increase consumption for the community. The minimum wage increase should also raise workers’ productivity, thus increasing their competitiveness in Southeast Asia.

On the other hand, companies will face challenges related to the 6.5% minimum wage increase. This is because entrepreneurs are also experiencing various challenges, both at the national and global levels. If employers cannot deal with it, there is a threat of layoffs of employees.

DKI Jakarta Government Announces Jakarta UMP in 2025 to be Rp 5.3 million

The Provincial Government of DKI Jakarta has set the 2025 Provincial Minimum Wage (UMP). Jakarta Acting Governor Teguh Setyabudi said the determination of the 2024 Provincial Minimum Wage refers to Government Regulation (PP) Number 16/2024 concerning Wages.

“Thus, the Jakarta UMP for 2025 is Rp 5,396,761,” Teguh said, as quoted from Detiknews.

He added the DKI Jakarta UMP increase was 6.5% compared to the previous year. The 2024 DKI Jakarta UMP is IDR 5,067,381.

This UMP value also applies to workers/labourers with a working period of less than 1 year.

Minister of labour Yassierli said that workers or labourers can report business actors who do not pay wages under the 2025 minimum wage that has been determined.

“If there are companies that do not apply the 2025 UMP, of course, the statutory mechanism applies. We also have labour inspectors, so workers or labourers can report to labour inspectors,” he said as reported by Tempo.

The 2025 minimum wage in 38 Indonesian provinces

The following is a breakdown of UMP estimates from 38 provinces in Indonesia:

1. Aceh: IDR 3,685,615
2. North Sumatra: IDR 2,992,559
3. West Sumatra: IDR 2,994,246
4. Riau: IDR 3,508,775
5. Jambi: IDR 3,234,533
6. South Sumatra: IDR 3,681,570
7. Bengkulu: IDR 2,670,039
8. Lampung: IDR 2,893,068
9. Bangka Belitung: IDR 3,876,600
10. Riau Islands: IDR 3,623,653
11. Banten: IDR 2,905,119
12. Jakarta: IDR 5,396,760
13. West Java: IDR 2,191,232
14. Central Java: IDR 2,169,348
15. Special Region of Yogyakarta: IDR 2,264,080
16. East Java: IDR 2,305,984
17. Bali: IDR 2,890,060.68
18. West Nusa Tenggara: IDR 2,602,931
19. East Nusa Tenggara: IDR 2,328,969
20. West Kalimantan: IDR 2,878,286
21. Central Kalimantan: IDR 3,473,621
22. South Kalimantan: IDR 3,496,194
23. East Kalimantan: IDR 3,579,313
24. North Kalimantan: IDR 3,580,160
25. North Sulawesi: IDR 3,775,425
26. Central Sulawesi: IDR 2,914,583
27. South Sulawesi: IDR 3,657,525
28. Southeast Sulawesi: IDR 3,073,487
29. Gorontalo: IDR 3,221,731
30. West Sulawesi: IDR 3,104,430
31. Maluku: IDR 3,141,699
32. North Maluku: IDR 3,408,000
33. West Papua: IDR 3,613,545
34. Papua: IDR 4,285,847
35. Central Papua: IDR 4,285,847
36. Mountainous Papua: IDR 4,285,847
37. Southwest Papua: IDR 4,285,847
38. South Papua: IDR 4,285,847

cover: Photo by Sewupari Studio/Pexels

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