KSPI proposes minimum wage increase of 7.5% to 9.5%
This figure will be our fight within the Wage Council and through various constitutional channels.
Jakarta (ANTARA) - The Confederation of Indonesian Trade Unions (KSPI) has proposed a minimum wage increase of 7.5 per cent to 9.5 per cent for 2027, taking into account the differences in inflation and economic growth in each region.
“This figure will be our fight within the Wage Council and through various constitutional channels,” said KSPI President Said Iqbal in a statement in Jakarta on Wednesday.
According to Said Iqbal, the proposal needs to be submitted early because the 2027 Provincial Minimum Wage (UMP) is scheduled to be determined on 1 November 2026, while the Regency/City Minimum Wage (UMK) and sectoral minimum wages are scheduled for determination on 10 November 2026.
“We are proposing that the 2027 minimum wage increase, for both UMP and UMK, falls within the range of 7.5 per cent to 9.5 per cent,” he said.
Said Iqbal explained that there are three main components used by KSPI and the Labour Party to calculate the proposed 2027 minimum wage increase: the average annual national inflation rate (year-on-year), the average national economic growth, and a specific index.
For the specific index, KSPI is using a figure of 0.9, in accordance with the range provided in Government Regulation Number 49 of 2026, which ranges from 0.5 to 0.9.
“In proposing the minimum wage and sectoral minimum wage increases for 2027, KSPI is using the average national inflation, average national economic growth, and a specific index of 0.9. The government regulation provides a range of 0.5 to 0.9, so the use of the 0.9 figure is well-founded,” he said.
The data used covers the period from October 2025 to September 2026. However, as the September 2026 data has not yet been published by Statistics Indonesia (BPS), the preliminary calculation uses the latest available data up to August 2026.
According to Said Iqbal, based on official BPS data collected for the period of October 2025 to August 2026, the average national inflation stands at 3.20 per cent, while the average national economic growth is at 5.43 per cent.
“Even when the September data is released, we estimate the figures will not differ significantly. Therefore, for now, we are using an average national inflation of 3.20 per cent and national economic growth of 5.43 per cent,” he added.
By incorporating a specific index of 0.9 into the calculation method used by KSPI, a national average increase of approximately 7.7 per cent is obtained. This figure serves as one of the bases for determining the lower limit of the proposed minimum wage increase of 7.5 per cent.
Said Iqbal emphasised that the economic conditions of every province and regency/city differ. Inflation and economic growth in West Java, for example, are not the same as in North Maluku.
Similarly, the economic conditions in Bekasi Regency are not the same as in Gresik Regency. Therefore, KSPI is not proposing a single fixed figure, but rather an increase range of 7.5% to 9.5%.