Politics · Indonesia · 2 hrs ago
Indonesia Estimates Living Costs for 2027 Provincial Minimum Wages
Indonesia is preparing its 2027 provincial minimum wage rules.
Manpower Minister Yassierli says the government is estimating the cost of a decent living, or KHL, using collected data.
The average provincial minimum wage in 2026 was 3.508 million rupiah, compared with an average KHL of 4.281 million rupiah.
That means minimum wages covered about 82% of estimated needs, leaving a monthly gap of roughly 770,000 rupiah on average.
An economist says annual wage increases may not close the gap if workers’ starting pay is already below living costs.
The KHL estimate is based on province-level data, which may miss differences between cities and districts, as well as real food price increases.
Officials will discuss the wage formula with national tripartite and wage-setting bodies before deciding the 2027 minimum wages under current law.
Indonesia is estimating decent living needs as one reference for setting provincial minimum wages for 2027.
Manpower Minister Yassierli said the estimates are being calculated from collected data and reviewed by relevant ministries.
The wage-setting formula will be discussed with the National Tripartite Cooperation Institution and the National Wage Council.
Economist Yusuf Rendy Manilet said average provincial minimum wages in 2026 were below the national average estimate of decent living needs.
He said the gap between wages and living costs varies by location and that provincial-level estimates may not capture differences between cities and districts.
- Who
- The Indonesian government, led on this issue by Manpower Minister Yassierli, is preparing the estimates. Economists Yusuf Rendy Manilet and Ronny P. Sasmita commented on wage adequacy.
- What
- The government is estimating decent living needs as an input for setting 2027 provincial minimum wages.
- When
- Yassierli discussed the estimates on 21 October. The article was published on 22 October 2026.
- Where
- The discussion took place in Jakarta, Indonesia. The estimates are being prepared for the provinces.
- Why
- The estimates are intended to inform provincial minimum wage setting and follow legal requirements on wages and minimum wage limits.
Indonesian government
Yusuf Rendy Manilet
Role of decent living needs
Indonesian government
The government is calculating decent living needs as one reference for setting minimum wages.
Yusuf Rendy Manilet
The current wage policy does not fully enable workers to live decently, and average minimum wages remain below average decent living needs.
Use of estimates
Indonesian government
The estimates are being prepared from available data and will be discussed with wage-setting bodies.
Yusuf Rendy Manilet
The estimates have operational limitations, including being available only at provincial level and relying on historical consumption data.
Yassierli said the government was calculating estimates of decent living needs in Jakarta.
CNN Indonesia published its report on the estimates and the debate over wage adequacy.
- 2027 wage-setting input
- Decent living needs estimates
- Average provincial minimum wage in 2026
- Rp3.508 million
- Average national decent living needs estimate
- Rp4.281 million
- Estimated monthly shortfall
- Around Rp770,000
- Number of provinces in the 2026 average
- 38
2 sources
What people are saying
We will evaluate, estimate and calculate from the available data. We will aim to issue an estimate of what decent living needs look like. Last year, we already had figures for each province.
This means the minimum wage covers only around 82 percent of decent living needs, with a shortfall of around Rp770,000 each month.
When the starting wage is already below decent living needs, annual increases only ensure that wages do not fall further behind, but may not be enough to catch up with workers’ real needs.
Even then, it may not cover health needs, children’s education, loan payments, emergency savings or unexpected expenses.