Business · Economy · 17 hrs ago
Employers urge Indonesia to weigh unemployment in 2027 minimum wages
APINDO employment chief Bob Azam wants unemployment considered when Indonesia sets provincial minimum wages for 2027.
The government is using new rules to set the wages, which apply across Indonesia’s provinces.
Azam says productivity and local unemployment should shape wage levels, because a high minimum wage does not automatically create jobs.
He warns that high wages alongside high unemployment can push companies elsewhere, reducing the chance of creating work in those areas.
The National Wage Council, which was previously dissolved, is expected to be formed again to discuss next year’s wage levels.
Azam also suggested grouping areas by size and living costs when setting wages, but no decision on that approach is stated.
APINDO labor affairs chief Bob Azam urged Indonesia to consider regional unemployment and productivity when setting 2027 provincial minimum wages.
He said high minimum wages do not always lead to more jobs.
Azam warned that high labor costs in areas with high unemployment could encourage companies to move elsewhere.
He said the National Wage Council would be re-established to discuss next year’s wage levels.
Azam also suggested grouping regions by characteristics, such as city size and cost of living, when setting wages.
- Who
- Bob Azam, head of labor affairs at APINDO, Indonesia’s employers’ association.
- What
- He urged the government to consider productivity and unemployment when setting 2027 provincial minimum wages.
- When
- November 9, 2026.
- Where
- At the Ministry of Industry office in Jakarta.
- Why
- He said high minimum wages do not always create jobs and could lead companies to move to other regions.
This story does not have two clearly opposing sides.
The government is using new rules to determine provincial minimum wages for 2027.
Bob Azam urged the government to consider productivity and unemployment in setting the wages.
- Wage year
- 2027
- Speaker
- Bob Azam, APINDO labor affairs chief
- Statement date
- November 9, 2026
- Location
- Ministry of Industry office, Jakarta
- Proposed considerations
- Regional productivity and unemployment figures
What people are saying
productivity and unemployment figures can be considerations in wage calculations.
it is not possible for unemployment to be high while the minimum wage is also the highest.
We must avoid this kind of situation. Wages should not be high while employment is not created.