Airlangga Opens His Voice Regarding The 2025 UMP Increase

Coordinating Minister for Economic Affairs (Menko) Airlangga Hartarto. (Photo: Doc. ANTARA)

Coordinating Minister for Economic Affairs Airlangga Hartarto opened his voice regarding the determination of the 2025 provincial minimum wage (UMP) to wait in November after the results of a report from the Central Statistics Agency (BPS).

"The UMP cycle will be in November. So, we'll just have to wait for the results of the Central Statistics Agency (BPS) report first," he said after the Pre-Employment Alumni Meeting at Ali Wardhana Building, Coordinating Ministry for the Economy, Thursday, October 3.

However, Airlangga did not answer the question of the opportunity to revise the Wage PP.

Previously, the Confederation of Indonesian Trade Unions (KSPI) 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.

Iqbal said the request for a minimum wage increase in 2025 did not use Government Regulation (PP) Number 51 of 2024. Since the beginning, 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.