New Formula For The 2024 UMP Calculation, When Will The Labor Salary Increase Start Applicable?

Illustration of the new formula for calculating the 2024 UMP (Freepic)

YOGYAKARTA - The government has issued a new regulation on the calculation of the Provincial Minimum Wage (UMP) in Government Regulation (PP) Number 51 of 2023 concerning Wages. The regulation is stipulated as a substitute for PP Number 36 of 2021. So what is the new formula for calculating the 2024 UMP?

Workers or workers may be happy because the Minimum Wage this year is certain to increase. President Jokowi has determined a new formula to calculate the UMP and City Minimum Wage (UMK). Through this regulation, the government regulates wage increases by calculating using 3 variables.

Ida Fauziyah, Minister of Manpower, said that the increase in the UMP was a form of appreciation for the contribution of workers / worse for economic development. To look forward to the increase in wages, the public needs to know the new formula for calculating the 2024 UMP.

Minister of Manpower Ida Fauziyah conveyed the calculation or formula for the increase in the Minimum Wage using 3 variables. The three variables are economic growth (PE), certain indexes, and inflation.

Here's a new formula for calculating the Minimum Wage that you need to know:

UM (t+1) is the Minimum Wage to be applied. While the UM (t) is the Minimum Wage of the Year.

While the minimum wage adjustment value is calculated with the following formula:

Symbolism is a certain index that represents the contribution of labor to economic growth at the provincial or city/district level. Symbols of fire are variables in the range of values 0.10 to 0.30.

The determination of the value of the symbol is carried out by the Provincial Wage Council or the City/Regency Wage Council by considering two variables:

- Labor absorption rate

- Average or medium of wages

There are also other factors that determine the symbol, which is a factor relevant to employment conditions. If later the Minimum Wage adjustment is made from a smaller or equal calculation to zero, the Minimum Wage that will be applied is the same as the minimum wage value for the current year. While the data used in the Minimum Wage calculation is data from an authorized institution in the field of statistics.

In the value of the Minimum Year Wage in certain areas exceeding the average household consumption divided by the average number of household members working in a province or city/district, the formula for calculating the value of the minimum wage adjustment is as follows

This new regulation regarding the increase in the minimum wage was issued to coincide with Heroes' Day, namely on November 10, 2023. Minister of Manpower Ida said this regulation would be a basic reference in determining the 2024 minimum wage and so on.

Ida Fauziyah said that authorized officials in the employment sector were instructed to set the UMP no later than November 21. Meanwhile, the determination of the UMK is carried out no later than November 30.

"Furthermore, we ask the Governors, Heads of Offices in charge of manpower, as well as the Regional Wage Council to carry out their duties as mandated by this government regulation, and the determination of the Provincial Minimum Wage is set no later than November 21 and for the Regency/City Minimum Wage on November 30," said Ida Fauziyah.

That is information regarding the new formula for calculating the 2024 UMP which needs to be understood by the public. The new formula for determining the increase in the minimum wage uses three variables, namely economic growth (PE), certain indexes, and inflation. This regulation brings fresh air to the welfare of workers/laborers.

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