Apindo Advocates for Balanced Approach in 2026 Minimum Wage Calculation

Business Community Emphasizes Economic Factors in Wage Formula

The Indonesian Employers Association (Apindo) has stressed the importance of maintaining a proportional alpha value in the formula for determining the 2026 Provincial Minimum Wage (UMP). According to Shinta W. Kamdani, Apindo's Chair, the business community supports the wage formula established through Government Regulation No. 51/2023, which was reinforced by Constitutional Court Decision No. 168/2023.

Key Principles for Wage Determination

Apindo highlights several critical principles that must be maintained in the wage calculation process:

1. Alpha value proportionality: The alpha component must remain proportional to economic conditions, regional productivity, and Decent Living Needs (KHL).
2. Sectoral minimum wage implementation: Strict criteria should be applied when setting sectoral minimum wages, as mandated by the Constitutional Court decision.
3. Data-driven decision making: All components of the wage policy, including KHL calculations, must be based on objective and valid data such as BPS's Susenas data.

Regulatory Context and Business Perspective

The business community's stance is grounded in recent regulatory developments. Government Regulation No. 51/2023 provides the framework for wage determination, while the Constitutional Court's decision further strengthens its implementation. Apindo's support for this framework reflects their commitment to a structured wage-setting process that balances various economic factors.