Executive Summary

Key insights and market outlook

Indonesian labor unions, led by KSPI President Said Iqbal, are threatening a national strike involving 5 million workers if the government proceeds with a minimum wage increase below 6.5% for 2026. The unions reject the Ministry of Manpower's proposed calculation method, suggesting instead three alternative increase rates, with 6.5% being the preferred option ²

. The dispute centers on the government's use of a limited economic index (0.2 to 0.7) in their calculations.

Full Analysis

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Deep Dive Analysis

Indonesian Labor Unions Threaten National Strike Over Minimum Wage Proposal

Dispute Over 2026 Minimum Wage Calculation

Indonesian labor unions, led by Konfederasi Serikat Pekerja Indonesia (KSPI) President Said Iqbal, are on the brink of organizing a national strike involving 5 million workers if their demands regarding the 2026 Provincial Minimum Wage (UMP) are not met ¹

. The unions are strongly opposing the Ministry of Manpower's (Kemenaker) proposed calculation method for determining the minimum wage increase.

Alternative Proposals and Government Position

The labor unions have presented three alternative percentage increases for consideration:

6.5% increase - the preferred option, referencing President Prabowo Subianto's previous decision on UMP 2025 ²
Source 2
https://finance.detik.com/berita-ekonomi-bisnis/d-8207719/3-opsi-buruh-ke-pemerintah-soal-kenaikan-ump-2026
.
Other alternatives were mentioned but not specified in the sources.

The dispute arises from the government's use of a limited economic index ranging between 0.2 to 0.7 in their calculations, which the unions strongly reject ¹

.

Potential Impact and Next Steps

The planned national strike, potentially involving millions of workers, could have significant economic implications if carried out. The labor unions maintain that their proposed increase is necessary to maintain workers' welfare amid economic changes.

References