November 26, 2025 | 07:36 am
TEMPO.CO, Jakarta - The Indonesian Employers Association (Apindo) urges the Indonesian government to use a calculation formula in determining the 2026 Provincial Minimum Wage (UMP).
"Our hope is that it will not be like last year, where there was no formula and just a number," said Chair of Apindo Shinta Kamdani, in South Jakarta, on Tuesday, November 25, 2025.
Shinta said the calculation formulation for changes in UMP has been regulated in Government Regulation Number 51 of 2023. Article 26 of the regulation explains that the change in the value of UMP is calculated using a formula by considering the variables of economic growth, inflation, and a specific index or alpha (a).
Alpha represents the variable that represents the labor contribution to the economic growth of the province or regency/city.
In addition to urging the government to include the alpha value, Shinta asks for the calculation of UMP to be based on the element of the decent living needs (KHL), as stated in the Constitutional Court Decision Number 168 of 2023.
Vice Chair of the Manpower Division of Apindo Darmoto requests that the application of the alpha value be done proportionally. The aim is for the UMP amount to be in line with the regional economic conditions, productivity levels, and business capacities in each sector.
Moreover, Darmoto believes that economic growth does not solely depend on labor. Darmoto considers that the determination of alpha also needs to consider investment or capital, technology, and total factor productivity (TPF).
Therefore, Darmoto states that the government cannot standardize the alpha value throughout all regions. He also suggests that the calculation of the alpha value in a region should be done by considering the ratio of UMP to decent needs. "Especially whether the ratio is above or below the national average," he said.
He believes that a data-based calculation approach through the formula can produce a more objective and fair UMP amount.
The Ministry of Manpower is still finalizing the government regulation (PP) regarding the 2026 minimum wage. Minister of Manpower Yassierli revealed that the calculation of the 2026 minimum wage in the draft PP formulation does not point to a single number.
Yassierli explained that according to Constitutional Court Decision Number 168 of 2023, the 2026 minimum wage will be in the form of a range. "We will grant the authority to the Provincial, City, and Regency Wage Council to determine within that range in accordance with the economic growth in their respective regions or areas," said Yassierli in a press conference at his office in Jakarta on Thursday, November 20, 2025.
With this approach, the government hopes to narrow the wage disparity between regions. In addition, the calculation of the minimum wage will also include the aspect of a decent living needs. Yassierli said the ministry has formed a team to calculate the estimation of decent living needs.
Anastasya Lavenia Yudi contributed to the writing of this article.
Editor's Choice: Indonesian Trade Unions Reject 2026 Provincial Minimum Wage Formula
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