Indonesian Labor Unions Reject New Wage Regulation

Strong Opposition to Presidential Decree

Indonesian labor unions, led by the Confederation of Indonesian Workers' Unions (KSPI) and the Labor Party, have strongly rejected the new wage regulation signed by President Prabowo Subianto on December 16, 2025 ¹

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Source 2

https://finance.detik.com/berita-ekonomi-bisnis/d-8264969/ancaman-demo-berjilid-jilid-usai-prabowo-teken-aturan-kenaikan-upah

. The regulation introduces a new formula for determining the Provincial Minimum Wage (UMP) for 2026, calculated as Inflation + (Economic Growth x Alpha) with Alpha ranging between 0.5-0.9 ³

Source 3

https://finance.detik.com/berita-ekonomi-bisnis/d-8265159/cek-simulasi-kenaikan-ump-dki-jakarta-jawa-barat-2026

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Key Points of Contention

1. Lack of Meaningful Social Dialogue: Union leaders, particularly KSPI President Said Iqbal, argue that workers were not meaningfully involved in the formulation of the regulation. They claim that there was only a one-time socialization session held on November 3, 2025, without any substantive discussion or opportunity for feedback ²

   Source 2

   https://finance.detik.com/berita-ekonomi-bisnis/d-8264969/ancaman-demo-berjilid-jilid-usai-prabowo-teken-aturan-kenaikan-upah
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2. Secrecy of Regulation Details: KSPI also criticizes that the full content of the wage regulation was not openly disclosed to labor unions. This lack of transparency has fueled distrust among workers ²

   Source 2

   https://finance.detik.com/berita-ekonomi-bisnis/d-8264969/ancaman-demo-berjilid-jilid-usai-prabowo-teken-aturan-kenaikan-upah
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3. Potential Harm to Workers: The unions argue that the new formula, particularly the definition of Decent Living Needs (KHL), does not align with Minister of Manpower Regulation No. 18/2020, which stipulates 64 components of KHL. They contend that this could lead to inadequate wage adjustments that do not reflect the actual cost of living ¹

   Source 1

   https://nasional.kontan.co.id/news/kspi-dan-partai-buruh-tolak-pp-soal-pengupahan
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Government Response

Minister of Manpower, Yassierli, has assured that the government has considered various aspirations, including those from labor unions, before finalizing the regulation. He emphasized that the new formula provides flexibility to regional heads in determining the wage increase, as they can choose the Alpha value within the given range ⁴

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Projected Wage Increases

Based on the new formula, simulations for DKI Jakarta and West Java show varying potential increases:

• For DKI Jakarta, using Alpha values of 0.5 to 0.9, the UMP could increase between 4.88% to 6.86%, resulting in monthly wages ranging from Rp 5,660,122 to Rp 5,766,978 in 2026 ³
  Source 3

  https://finance.detik.com/berita-ekonomi-bisnis/d-8265159/cek-simulasi-kenaikan-ump-dki-jakarta-jawa-barat-2026
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• For West Java, the projected increases range from 4.79% to 6.87%, with monthly wages potentially rising from Rp 2,296,198 to Rp 2,341,776 ³
  Source 3

  https://finance.detik.com/berita-ekonomi-bisnis/d-8265159/cek-simulasi-kenaikan-ump-dki-jakarta-jawa-barat-2026
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