Indonesian Workers Paid Below 2025 Minimum Wage, Majority Are Blue Collar

The study by the Institute for Economic and Social Research, Faculty of Economics and Business, University of Indonesia (LPEM FEB UI) reveals that 38.9 million Indonesian workers will be paid below the district/city minimum wage (UMK) in 2025.

By occupation, the highest number reported came from elementary occupations, totaling 14.2 million people.

This was followed by service and sales workers (7.5 million) and craft and related trades workers (4.7 million).

Meanwhile, the fewest were managers (0.4 million) and technicians and associate professionals (1.4 million).

The research team assessed that the distribution of workers reporting wages below the UMK by occupation shows a sharp segmentation in the labor market between blue-collar and white-collar jobs.

Blue-collar refers to workers who perform physical or technical tasks in the field, factories, or construction, often relying on technical skills rather than high formal education.

In contrast, white-collar refers to office workers with managerial, administrative, or professional duties that involve minimal physical activity and usually require higher education.

"Generally, blue-collar workers still dominate in terms of numbers, but the data also indicates that white-collar workers are not entirely protected from the risk of wages below the minimum standard," said the research team from the Labor Market Brief Volume 6 November 2025 report, published on December 31, 2025.

The research team analyzed that elementary occupations, which fall into the blue-collar category, are generally low-productivity, manual, daily-wage-based, and often found in the informal sector or small-scale businesses.

"In this segment, the UMK often serves as a normative reference but is not always an effective boundary in wage practices," the researchers stated.

Researchers also highlighted that white-collar workers, especially at entry and junior levels, are not necessarily receiving better wages, with reports of pay below the UMK.

"Contract-based jobs, short-term projects, and professional positions in small service sectors often fall outside established formal wage structures," the research team said.

Below is a breakdown of workers paid below the UMK in 2025 by occupation:

• Elementary occupations: 14.2 million people
• Service and sales workers: 7.5 million people
• Craft and related trades workers: 4.7 million people
• Professionals: 3.8 million people
• Clerical support workers: 2.7 million people
• Plant and machine operators and assemblers: 2.4 million people
• Skilled agricultural, forestry, and fishery workers: 1.9 million people
• Technicians and associate professionals: 1.4 million people
• Managers: 0.4 million people.

This data was processed by LPEM FEB UI from the Ministry of Manpower (Kemenaker) and the February 2025 edition of Sakernas (National Labor Force Survey) from Statistics Indonesia (BPS).