Politics · Indonesia · 3 hrs ago
Jakarta’s 2027 Minimum Wage Talks Set to Begin on November 9
Jakarta’s 2027 minimum wage talks begin on November 9, when the provincial wage council holds its first meeting.
Employers want the formula’s alpha value, which affects the size of wage increases, to be no higher than 0.5.
They estimate that an alpha of 0.5 could raise production costs by 20% to 30%, and say wage decisions should also consider business costs and productivity.
Labor representatives reject the employers’ proposal and want the alpha value to be above 0.9, with 1 as their minimum, citing weak economic conditions and pressure on workers’ purchasing power.
The first meeting will consider which sectors qualify for separate provincial sectoral minimum wages, not decide the overall increase.
The discussion is expected to use the 2025 wage regulation, but workers’ representatives are waiting to see the official text of a newly passed employment protection law that could affect the wage formula.
Jakarta’s Wage Council is scheduled to begin discussions on the 2027 provincial minimum wage on November 9, 2026.
The first session will identify sectors for the 2027 provincial sectoral minimum wage discussion, rather than set the wage increase.
Employers want the formula’s index, known as alpha, to be no higher than 0.5, while labor representatives want it above 0.9 and at least 1.
The two sides differ over how the wage formula should reflect business costs and workers’ purchasing power.
Labor representatives are also awaiting the official text of a newly passed employment-protection law, which they say could affect the wage formula.
- Who
- Jakarta’s Wage Council, including employer and labor representatives, will discuss the 2027 provincial minimum wage.
- What
- The council’s first session will identify sectors for the sectoral minimum wage discussion. Employers and labor representatives disagree over the alpha value in the wage formula.
- When
- The first session is scheduled for November 9, 2026.
- Where
- Jakarta, Indonesia.
- Why
- The discussions will address the 2027 minimum wage and which sectors should be included in the sectoral minimum wage process.
Employers
Labor representatives
Alpha value
Employers
Employers want alpha below 0.5 or no higher than 0.5.
Labor representatives
Labor representatives want alpha above 0.9, with 1 as the minimum they propose.
Reasoning
Employers
Employers say wage increases raise labor and other operating costs, potentially increasing production costs.
Labor representatives
Labor representatives say economic conditions are difficult and workers’ purchasing power has been affected.
Policy basis
Employers
Employers want the 2027 wage decision to follow Government Regulation No. 49 of 2025 and oppose further central-government intervention.
Labor representatives
Labor representatives are waiting for the official text of the new employment-protection law, which they say may relate to the wage formula.
The Wage Council session was initially scheduled for this date before being rescheduled.
Jakarta’s Wage Council is scheduled to hold its first session and identify sectors for the sectoral minimum wage discussion.
- First session
- November 9, 2026
- Employer proposal
- Alpha below 0.5 or at most 0.5
- Labor proposal
- Alpha above 0.9, with 1 as the minimum
- Regulation cited by employers
- Government Regulation No. 49 of 2025
- Session focus
- Identify sectors for the 2027 provincial sectoral minimum wage discussion
What people are saying
From the employers, we hope the alpha is below 0.5. The hope is below 0.5. At most, 0.5.
We strongly reject the employers’ proposal to give an index of only 0.5, because the current economic conditions are very concerning and workers’ purchasing power has been directly affected by the weak economy.
Our hope is that the index should be more than 0.9 as set out in Government Regulation 49/2025. The minimum should be 1, as we previously told the DPR in the draft of the new Employment Law.