Wednesday, 1 November 2017

Indonesian Govt. Gov't Increases Provincial Minimum Wages by 8.71% for 2018

Jakarta. The government has set a 8.71 percent increase in minimum wages across the country for next year to allow workers to adjust to rising living costs, a minister said on Wednesday (01/11).

"The governors have all been instructed to announce their province's minimum wage today. The increase [of 8.71 percent] refers to data from the BPS [Central Statistics Agency]," Labor Minister Hanif Dhakiri told reporters in Jakarta.

According to a 2015 government regulation, the minimum wage increase derives from the sum of inflation and economic growth over the past 12 months. BPS data showed inflation was at 3.72 percent from September 2016-September 2017, while economic growth was recorded at 4.99 percent over the period, Hanif said.

The minister said municipal minimum wages must be announced no later than Nov. 21. The new wages will then be enforced on Jan. 1, 2018.

Hanif said that the 2015 government regulation ensures that any wage increase would be predictable so as not to impact local businesses too severely.

The Jakarta administration today set its highest minimum wage ever of Rp 3.36 million ($247), while Yogyakarta has the lowest minimum wage of any province in the country at Rp 1.34 million.

Workers have been calling for an increase in their wages for months. Workers in Jakarta demanded a 16 percent increase in the minimum wage to total Rp 3.9 million.

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