Minimum Wage to Increase by 6.5 Percent in 2025
President Prabowo Subianto announced today that Indonesia‘s minimum wage will increase by 6.5 percent in 2025. The decision was made following a meeting with several key ministers at the Presidential Palace complex.
Prabowo emphasized the importance of standardizing wages across provinces, cities, and regencies. He said, “Therefore, the minimum wage was determined with the purpose of enhancing workers’ purchasing power while considering business competitiveness.”
Fine-tuning the policy will be handled by provincial, city, and regency wage councils, who will determine the specificusa sectorial minimum wages.
Minister of Manpower Yassierli had initially proposed a 6 percent increase. However, following a meeting with labor representatives at the Presidential Palace, President Subianto decided to raise it to 6.5 percent.
President of the Labor Party Said Iqbal expressed support for the final decision. He said, “The 2025 minimum wage policy
will pay attention to the welfare of workers and the sustainability of the business world,”
Iqbal, however, affirmed that workers will continue to advocate for a sectoral minimum wage exceeding this rate. Likewise, they retain their opposition to
the proposed increase in the value-added tax rate to 12 percent and the levies imposed by social security organizers.
What are the potential implications of a 6.5% minimum wage increase on the livelihoods of Indonesian workers, and how might these implications differ across various sectors?
**Interviewer:** President Subianto has announced a 6.5% increase in Indonesia’s minimum wage for 2025. Labor Party President Said Iqbal expresses support, calling it a policy that balances worker welfare with business sustainability. However, Iqbal also states that workers will continue to push for sector-specific increases beyond this rate. Given these contrasting viewpoints, do you think the 6.5% increase strikes the right balance, or does it favor one group over the other?
