2025 Indonesia Minimum Wage Boost: Prabowo Announces 6.5% Increase for Workers
Indonesian President Announces Minimum Wage Increase for 2025
Indonesian President Prabowo Subianto has declared a 6.5% increase in the provincial minimum wage for 2025. This decision was made during a closed-door meeting on November 29, 2024, attended by key ministers including Finance Minister Sri Mulyani and Manpower Minister Yassierli.
Prabowo highlighted the importance of the minimum wage as a social safety net for workers, especially for those employed for less than a year. He stated that the increase aims to boost the purchasing power of workers while considering business competitiveness.
The sectoral minimum wage determinations will be handled by wage councils at provincial, city, and district levels. The Minister of Manpower will issue more detailed regulations about the minimum wage structure.
Historical Context of Minimum Wage in Indonesia (2019-2024):
- 2019: Rp2,455,662
- 2020: Rp2,672,371.36
- 2021: Rp2,687,723.69
- 2022: Rp2,729,436.16
- 2023: Rp2,923,309.40 (7.5% increase from 2022)
- 2024: Rp3,113,359.85
The proposed increase in the minimum wage for 2025 follows a previous suggestion of a 6% rise. The decision to increase it to 6.5% came after discussions with labor representatives.
Said Iqbal, chair of the Labor Party, supported the wage increase. He mentioned that it aligns with workers’ aspirations and emphasized the need for sectoral minimum wage increases. Iqbal also noted workers’ opposition to raising the Value Added Tax (VAT) and contributions to the Social Security Administration.
This announcement marks a significant step in addressing worker welfare and enhancing economic stability in Indonesia.