Labour Leader Proposes 10% Increase for 2027 Minimum Wage Using Alternative Calculation Model
The President of the All Indonesia Workers Union Association (ASPIRASI), Mirah Sumirat, has requested a 10% increase for the 2027 minimum wage. The proposed calculation model would move away from using the ‘alpha coefficient’ in the wage formula.
The proposed wage calculation would once again consider inflation, economic growth, and the results of market surveys or KHL (Kebutuhan Hidup Layak - Basic Living Standards) that have been conducted previously.
“From our side, we continue to propose not using a specific value coefficient, the alpha coefficient. We would continue to use inflation, economic growth, and the results of the surveys we have conducted all this time,” Mirah told CNBC Indonesia on Wednesday (22/09/2026).
“Our figure is not far off, roughly in the range of 10%. It is not far from that,” she added.
She explained that the price of basic necessities and inflation are critical considerations to ensure that wage increases do not lose purchasing power amidst rising living costs.
“Our assumption is that the government must be able to control the prices of basic foodstuffs and food prices. Furthermore, inflation must be maintained, and economic growth is already quite good,” she said.
For labourers, the wage formula is a vital component in the discussion of labour regulations. Any change to the formula will determine the extent of the minimum wage increase when the government begins setting the amounts for next year.
“Our proposal from the workers is that the formula for the Minimum Provincial Wage (UMP) should be decided without using the alpha coefficient, and that we revive market surveys and the functions of the Wage Council. That is our proposed draft,” said Mirah.
On the other hand, discussions regarding the 2027 minimum wage have yet to show 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 could come from the new Labour Bill. Therefore, there have been no discussions yet. There is no sign of it yet. So, I do not know whether they will start in October or when, but time is running out,” Mirah remarked.