The Economic Policy Analyst of the Indonesian Employers' Association assessed that a 6.5% increase in the minimum wage will place a heavy burden on the business community, especially in labor-intensive industries, which are currently a focus of the government's efforts to reduce unemployment. While the government aims to encourage a lower unemployment rate, it is simultaneously imposing excessive burdens on businesses. They hope the government can adopt a more neutral policy. The policy is intended to ensure sustained minimum wage growth while taking into account the productivity and competitiveness of national industries. Previously, President Prabowo announced an average 6.5% increase in the minimum wage for 2025.
The decision to raise the minimum wage was made after President Prabowo met with labor representatives. President Prabowo explained that the minimum wage serves as a social safety net for workers employed for less than 12 months, and its determination considers the need for a decent living. The Coordinating Minister for Economic Affairs stated that the government will establish a task force on layoffs. When asked about concerns over widespread layoffs due to the national minimum wage increase, he said the task force's focus is on studying the fundamental aspects of Indonesian industry.
The Economic Policy Analyst of the Indonesian Employers' Association assessed that a 6.5% increase in the minimum wage will place a heavy burden on the business community, especially in labor-intensive industries, which are currently a focus of the government's efforts to reduce unemployment. While the government aims to encourage a lower unemployment rate, it is simultaneously imposing excessive burdens on businesses. They hope the government can adopt a more neutral policy. The policy is intended to ensure sustained minimum wage growth while taking into account the productivity and competitiveness of national industries. Previously, President Prabowo announced an average 6.5% increase in the minimum wage for 2025.
The decision to raise the minimum wage was made after President Prabowo met with labor representatives. President Prabowo explained that the minimum wage serves as a social safety net for workers employed for less than 12 months, and its determination considers the need for a decent living. The Coordinating Minister for Economic Affairs stated that the government will establish a task force on layoffs. When asked about concerns over widespread layoffs due to the national minimum wage increase, he said the task force's focus is on studying the fundamental aspects of Indonesian industry.