This is the Proposed 2024 Jakarta UMP from the Government, Employers, and Labor Unions.

As of Monday afternoon (November 20, 2023), the Jakarta Provincial Government (Pemprov DKI Jakarta) has yet to announce the 2024 Jakarta Provincial Minimum Wage (UMP) increase.

The Jakarta Wage Council is still discussing the UMP proposals from three parties: the DKI Provincial Government and experts, employers, and labor unions.

"We tried to discuss a single figure (UMP proposal) to make it easier for the Acting Governor (to decide). It turned out that we couldn't agree on one figure. So, instead of voting, we proposed three figures (for the UMP)," said Djainal Abidin Simanjuntak, an expert from the Faculty of Economics at the University of Indonesia (UI) who attended the DKI Jakarta UMP discussion session, as reported by Antara on Sunday (November 19, 2023).

In determining the 2024 minimum wage, the DKI Provincial Government and experts refer to Government Regulation (PP) Number 51 of 2023.

This regulation stipulates that the "Adjustment Value" of the minimum wage is calculated using the formula: {inflation + (economic growth x alpha)} x current year's minimum wage.

The alpha in the formula is a variable within the range of 0.1 to 0.3, determined by considering the level of labor absorption, average/median wages, or other factors relevant to labor conditions.

Referring to this regulation, the Wage Council members from the DKI Provincial Government and experts calculated the 2024 DKI Jakarta UMP increase using an alpha of 0.3, resulting in a proposal of Rp5,067,381.

Then, the Wage Council members representing employers, represented by the Indonesian Employers Association (Apindo) and the Chamber of Commerce and Industry (Kadin), used an alpha of 0.2, resulting in a 2024 DKI Jakarta UMP proposal of Rp5,043,068.

On the other hand, representatives of the Wage Council from labor unions considered the alpha in Government Regulation Number 51 of 2023 too low and argued that it would not provide workers with a decent wage.

The labor unions used an alpha of 0.0815 and a different formula from the regulation, resulting in a 2024 DKI Jakarta UMP proposal of Rp5,637,068, or a 15% increase compared to this year.

Here's a breakdown of the 2024 DKI Jakarta UMP proposals and formulas from the DKI Provincial Government, employers, and labor unions:

1. Proposal from the DKI Jakarta Provincial Government and experts:

Adjustment Value = {inflation + (economic growth x alpha 0.3)} x 2023 UMP = {1.89% + (4.96% x 0.3)} x Rp4,901,798 = Rp165,583

Proposed 2024 UMP = Adjustment Value + 2023 UMP = Rp5,067,381

2. Employers' proposal:

Adjustment Value = {inflation + (economic growth x alpha 0.2)} x 2023 UMP = {1.89% + (4.96% x 0.2)} x Rp4,901,798 = Rp141,270

Proposed 2024 UMP = Adjustment Value + 2023 UMP = Rp5,043,068

3. Labor unions' proposal:

Adjustment Value = (inflation + economic growth + alpha 0.0815) x 2023 UMP = (1.89% + 4.96% + 0.0815) x Rp4,901,798 = Rp735,270

Proposed 2024 UMP = Adjustment Value + 2023 UMP = Rp5,637,068