October 17, 2025 | 10:53 am
TEMPO.CO, Jakarta - The Chair of the Indonesia's National Economic Council (DEN), Luhut Binsar Pandjaitan, has advised President Prabowo Subianto to take a balanced approach in determining the 2026 Regional Minimum Wage (UMP).
"I told the President, please don’t be pulled left or right. The best approach is the middle path," Luhut said during the event “1 Year of Prabowo-Gibran: Optimism for 8% Economic Growth” in Jakarta, as quoted by Antara on Thursday, October 16, 2025.
Luhut emphasized that the government should also consider investors’ interests when deciding the UMP, noting that labor union proposals often focus solely on workers’ needs.
"I told the President, why should we be dictated by labor organizations? We must consider investors as well. If we only focus on workers without balancing investor interests, it will be difficult. There has to be equilibrium," he said.
According to Luhut, his team has already calculated a proposed UMP formula, which has been reported to President Prabowo. The formulation takes into account the standard living wage while incorporating input from the Ministry of Manpower and employer associations.
Earlier, Minister of Manpower Yassierli said he hopes the 2026 UMP formulation can be completed by November 2025. He added that a team formed by the Ministry, involving relevant stakeholders, is currently studying the potential increase.
A professor from the Bandung Institute of Technology (ITB) assured that the 2026 UMP formulation would consider the standard living wage for workers.
"It is clear that the National Wage Council and the National Tripartite Cooperation Body (LKS Tripnas) will oversee this process, and we will facilitate the social dialogue needed to ensure it happens effectively," he said.
Yassierli also emphasized that the government will adhere to Constitutional Court Decision Number 168 in determining the minimum wage. Under this ruling, the UMP increase must account for inflation, economic growth, specific indices, and the fulfillment of decent living needs (KHL).
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