Indonesian Labor Unions Press for Significant Minimum Wage Increase

Demand for 8.5-10.5% UMP Hike for 2026

Indonesian labor unions, led by the Indonesian Workers' Union Confederation (KSPI), are demanding a substantial increase in the provincial minimum wage (UMP) for 2026, ranging between 8.5% to 10.5% ⁴

. The unions have warned of a potential national strike if their demands are not met, indicating a significant escalation in labor activism. The current negotiations are part of the annual wage adjustment process, which considers various economic indicators including inflation and GDP growth.

Alternative Proposals and Government Response

While rejecting the government's initial proposal, the labor unions have offered alternative options. One such proposal suggests a minimum increase of 6.5%, citing precedent from previous years when similar adjustments were made ³

. The government, through the Ministry of Manpower, is currently deliberating on the final figure in consultation with various stakeholders, including the National Wage Council (Depenas) and provincial wage councils ²

Source 2

https://finance.detik.com/berita-ekonomi-bisnis/d-8206897/buruh-tidak-benar-kenaikan-ump-sebabkan-phk

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Timeline for UMP 2026 Announcement

The Minister of Manpower, Yassierli, has announced that the final decision on the UMP for 2026 will be made public on November 21, 2025 ²

. This announcement comes as the labor unions continue to maintain pressure on the government to meet their demands. The outcome of this decision is being closely watched by both workers and employers across Indonesia, as it has significant implications for labor costs and economic activity.

Economic Context and Implications

The debate over the minimum wage increase is set against a backdrop of evolving economic conditions, including inflation rates and economic growth. Labor unions argue that a significant wage increase is necessary to maintain workers' purchasing power and support economic recovery. However, employers are concerned about the potential impact on operational costs and competitiveness, particularly for labor-intensive industries.