The 6.5 percent increase in the national minimum wage for 2025, announced by President Prabowo Subianto on Friday (Nov. 29), has sparked various pros and cons from multiple parties, business owners, and labor unions.
Many employers argue that the government should reconsider this decision, while many labor organizations support it.
Dr. Hempri Suyatna, a Social Development and Welfare lecturer at UGM’s Faculty of Social and Political Sciences (Fisipol UGM), believes that the minimum wage increase policy stems from the need to enhance workers’ purchasing power while improving their welfare.
According to him, the current minimum wage is insufficient to cover living costs.
“The data on minimum living needs are actually high. However, the existing minimum wages are far below what is required for a decent living,” said Dr. Suyatna to reporters on Wednesday (Dec. 4).
“This is part of the government’s efforts to push for workers’ welfare and the hope to increase public purchasing power. That may be the government’s reasoning behind this policy,” he added.
However, Dr. Suyatna emphasized that this policy should be further reviewed, particularly considering the employers’ circumstances. Wage policies can potentially cause businesses to shut down, which could affect the investment climate.
Therefore, Dr. Suyatna suggested that the issue of the national wage increase requires a dialogue process between the government, employers, and workers to find a solution that can improve workers’ welfare while supporting the business climate in Indonesia.
“I think what’s important is to maintain a continuous dialogue between workers, employers, and the government so that employers also feel respected. This should be seen as a dialogical process, and the hope is that this policy will work for everyone,” he stated.
Dr. Suyatna explained that the dialogue process between the government, employers, and workers should focus on wages and human resource development programs.
Improving workers’ skills would boost their employability and increase company productivity. He pointed out that the quality of human resources greatly affects Indonesia’s reputation, which has long been known as a provider of cheap labor. This perception should shift to one of providing high-quality human resources.
“I think this minimum wage increase plan is a momentum to improve the fate of workers and change the paradigm so that we are no longer known for cheap labor wages, but rather for productivity,” he concluded.
Author: Hanif
Editor: Gusti Grehenson
Photo: Freepik