The Government Is Still Finalizing The 2026 UMP Formula

Illustration of factory workers (ANTARA)

JAKARTA - The government is finalizing a new formula to determine the amount of the 2026 provincial minimum wage (UMP) increase. Minister of Manpower (Menaker) Yassierli said the discussion had also been consulted with President Prabowo Subianto before being announced to the public.

"We have directions from the President. Just wait," Yassierli said after attending a limited meeting with President Prabowo at the Presidential Palace, Jakarta, Thursday, November 27.

The new formulation of the 2026 UMP no longer uses one uniform figure nationally, as in the previous year. This change follows the decision of the Constitutional Court (MK) Number 168/PUU-XXI/2023 which requires the components of decent living needs (KHL) and regional disparities to be included in the calculation of the minimum wage. In addition, the determination of the UMP must also involve the Wage Council at the provincial, district and city levels.

The 2025 UMP policy which stipulates a uniform increase of 6.5% for 38 provinces is considered unfair because it ignores differences in economic conditions and the need for life in each region. This criticism is the basis for the government to formulate a more adaptive scheme.

Yassierli emphasized that the government must be careful because the minimum wage policy has a major impact on the welfare of workers and the stability of the regional economy. One number does not solve the disparity problem. That's why we propose a range, and that's why he (the president) agrees. However, how much will we update the range," he said.

The central government has provided guidance in the form of an increase range to local governments. Later, each regional government will determine the UMP based on local conditions, ranging from economic growth, inflation, to KHL in its region.

The Minister of Manpower added that new regulations are being prepared to adjust the Constitutional Court's decision, because PP Number 51 of 2023 concerning Wages is no longer relevant as a reference for determining the 2026 UMP.

After the regulations are complete, the government will immediately announce the amount of the UMP in each province. "Every province, city, district will come out with an increase in each. We will give the range," concluded Yassierli.