Workers Ask For Minimum Wage To Increase 8 To 10 Percent In 2025

President of the Confederation of Indonesian Trade Unions (KSPI) Said Iqbal. (Photo: ANTARA)

JAKARTA - The Confederation of Indonesian Trade Unions (KSPI) has asked the government to increase the Regency/City Minimum Wage (UMK) and Provincial Minimum Wage (UMP) by 8 to 10 percent by 2025.

KSPI President Said Iqbal said inflation in the last two years was in the range of 2.5 percent. Meanwhile, economic growth reached 5.2 percent.

When combined, continued Iqbal, the total is around 7.7 percent which is then rounded up to 8 to 10 percent.

The proposed minimum wage increase is 8 percent. However, KSPI proposed an increase of 2 percent so that the increase to 10 percent for areas that have a high wage disparity between adjacent districts/cities," he said in an official statement, Friday, September 27.

Iqbal hopes that the increase in the UMK and UMP can reduce the wage gap in these areas.

Over the past five years, continued Iqbal, especially in the first year, the minimum wage has not increased throughout Indonesia, which has resulted in a decrease in labor purchasing power. In the last two years, the minimum wage increase has been below the inflation rate.

"As an example in the Jabodetabek area, inflation reaches 2.8 percent, but the wage increase is only 1.58 percent. This means workers are nombok every month," said Said Iqbal.

In recent years, he continued, the increase in wages that occurred did not close inflation, so that the purchasing power of workers continued to decline. Even though the nominal wage has increased every year, in fact the real wages of workers continue to decline.

In the last ten years, Said Iqbal explained that the real wages of workers fell by around 30 percent. Real wages are nominal wages that are adjusted to the consumer price index.

"The increase in the price of goods is much higher than the nominal wage increase, so workers continue to be burdened and their purchasing power has declined sharply," he explained.

Therefore, he continued, KSPI and the Labor Party urged the government to consider an increase in the minimum wage of 8 to 10 percent by 2025.

"This is a step to restore labor purchasing power and reduce wage disparities between regions, which will ultimately boost the welfare of workers throughout Indonesia," he said.

According to Iqbal, it is time for the government to pay attention to the real conditions faced by workers. The increase in the minimum wage is a form of justice for workers who have worked hard but continue to feel the impact of inflation and economic policies that do not side with them.

Furthermore, Iqbal said the request for a minimum wage increase in 2025 did not use Government Regulation (PP) Number 51 of 2024. From the start, PP 51/2023 was rejected by all labor unions, including KSPI and the Labor Party.

The legal basis of PP No. 51 is the Omnibus Law on the Job Creation Law which is currently being sued through a judicial review at the Constitutional Court (MK) by KSPI, KSPSI, AGN, and the Labor Party.

Until now, there has been no decision from the Constitutional Court, so the government should not use PP Number 51 of 2023 in the calculation of the minimum wage in 2025.

On the other hand, Iqbal said the increase in the minimum wage in 2025 by 8 to 10 percent would only increase the purchasing power of workers by about 5 percent. In fact, in the last 10 years, the purchasing power of workers has decreased by 30 percent.

"Thus, even though the minimum wage in 2025 increases by 8 to 10 percent, the purchasing power of workers will still decrease by about 25 percent. Workers will still feel the burden because the wage increase has been consumed by the increase in the consumer price index," he explained.