As September begins, discussions regarding the minimum wage have\nalready commenced. The Indonesian Employers Association (APINCO) is\nhighlighting the issue of minimum wage gaps between different regions in\nIndonesia. These wage differences are believed to be affecting labour\nmarket conditions in several areas.<\/p>\n
This phenomenon is evident in the current situation in West Java,\nwhich is experiencing widespread layoffs, whereas Central Java is\ninstead facing difficulties in finding workers.<\/p>\n
\u201cThe phenomenon currently in West Java is that many layoffs are\noccurring, while in Central Java, it is actually difficult to find\nlabour,\u201d said Bob Azam, Chairman of Labour Affairs at the Indonesian\nEmployers Association (APINDO), to CNBC Indonesia on Saturday\n(5\/9\/2026).<\/p>\n
This condition needs to be a focus in the formulation of future\nlabour regulations. He believes that excessively large differences in\nminimum wages between regions can cause an imbalance in labour\ndistribution and investment. As is known, the highest regional minimum\nwage (UMK) in West Java for 2026 is Bekasi City at Rp5,999,443, whereas\nthe highest in Central Java is Semarang City at Rp3,701,709.<\/p>\n
\u201cThis is strange. It turns out the cause is the differing minimum\nwages. We must consider how to address this in the future so that the\ndisparity does not become even more disproportionate,\u201d he said.<\/p>\n
APINDO also believes that Indonesia needs to observe how other\ncountries, particularly within the ASEAN region, determine minimum wage\nincreases. One comparable country is Vietnam. Bob noted that Vietnam\nrecently increased its minimum wage by 7.2%, even though Vietnam\u2019s\ninflation stands at 3.3% and its economic growth has reached 8%.<\/p>\n
\u201cIf we look at our neighbour, Vietnam, they recently increased their\nminimum wage by 7.2% in January, with inflation at 3.3% and economic\ngrowth at 8%. If we used our formula, the increase would have been 10%,\nright? But they only increased it by 7%,\u201d he remarked.<\/p>\n
This comparison shows that every country has different formulas and\nwage policies. Therefore, Indonesia needs to study practices in ASEAN\ncountries so that wage policies can continue to protect workers while\nmaintaining the competitiveness of the business sector.<\/p>\n
He also reminded that minimum wage increases do not necessarily have\nto occur every year. In several countries, minimum wage adjustments are\nconducted over longer periods.<\/p>\n
\u201cAnd not all countries increase their wages every year. Some do it\nonce every two years,\u201d he said.<\/p>\n
In his view, the condition of companies is not uniform. Some\ncompanies have the capacity to pay higher wages, while others face\neconomic pressures and cannot be forced to provide the same\nincreases.<\/p>\n
\u201cIf the situation is good, then why not? Please, let the wages be\neven better. But if it is not good, do not force it. Because the current\neconomy is like a \u2018K-shaped\u2019 curve; some are rising, while others are\nfalling,\u201d he concluded.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/entrepreneurs-begin-calculating-2027-minimum-wage-here-are-the-leaks-1788612815", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }