Labour Leader Openly Requests 10% Increase in 2027 Minimum Wage
Labour groups are proposing a minimum wage increase of approximately 10% for 2027. This figure is considered sufficient to boost workers’ purchasing power without placing an excessive burden on the business sector.
Mirah Sumirat, President of the All Indonesia Trade Union Association (ASPIRASI), stated that the labour proposal avoids using the alpha coefficient in the wage formula. Instead, the calculation should reconsider inflation, economic growth, and results from ongoing market surveys.
“From our side, we continue to propose not using a specific value coefficient, the alpha coefficient. We maintain the use of inflation, economic growth, and the results of the surveys we have conducted,” Mirac told CNBC Indonesia on Wednesday (22/09/2026).
The proposal is still in its early stages and has not yet entered official government discussions. The determination of the minimum wage increase will still undergo a proposal process from the relevant ministry before the final decision rests with the President.
“For us, it is not far off, roughly in the range of 10%. Not far from that,” said Mirah.
This figure does not stand alone. The price of basic necessities and inflation are critical considerations to ensure that wage increases do not lose purchasing power amidst rising living costs.
“This assumes the government can control the prices of basic foodstuffs and food prices. Furthermore, inflation must be maintained, and economic growth is already quite good,” she added.
For labourers, the wage formula is a vital component of labour regulation discussions. Changes to the formula will determine the extent of the minimum wage increase when the government begins setting the rates for next year.
“Our proposal from workers regarding the Provincial Minimum Wage (UMP) is that the formula decided should not use the alpha coefficient, and should revive market surveys as well as the functions of the Wage Council. That is our draft proposal,” said Mirah.
On the other hand, discussions regarding the 2027 minimum wage have not yet shown concrete progress. The focus of the government and the House of Representatives (DPR) remains largely absorbed by the drafting of the new Labour Bill, which is targeted for completion in the near future.
“The calculation might come from the new Labour Bill. So, there hasn’t been any discussion yet. There is no sign of it yet. I do not know if they will start in October or when, but time is moving,” Mirah remarked.
Meanwhile, the Minister of Manpower, Yassierli, stated that discussions regarding the minimum wage formula will still be conducted by the government. Input from both trade unions and employers will be part of the process of drafting the new labour regulations.
“[Regarding the UMR formula?] Just wait, we will propose it first,” Yassierli told CNBC Indonesia at the BKPM Office, Jakarta, on Wednesday (09/09/2026).
In addition to the formula, discussions will also determine how wage regulations will be placed within the framework of the new Labour Law. The government must still align various proposals before these provisions enter the final formulation.