What is the Jakarta Provincial Minimum Wage Increase?

The 2018 Provincial Minimum Wage (UMP) for Jakarta has been set to increase by 8.71 percent. This means the minimum wage in Jakarta, effective January 2018, will increase by Rp 292,285 to Rp 3,648,035 per month. The increase in UMP next year is higher than the 2017 UMP increase, which was only 8.25 percent from the previous year. The increase in Jakarta's UMP next year is calculated based on an inflation rate of 3.72 percent and economic growth of 4.99 percent.

The increase in the DKI Jakarta UMP once reached more than 43 percent in 2013, rising to Rp 2.2 million from Rp 1.53 million per month. Compared to 2009, the UMP next year has increased by more than 240 percent.

Almost every year, wage increases have become a problem, potentially disrupting the business climate in Indonesia. Previously, wage increases were based on a decent living standard, but since 2015, the government has issued Government Regulation (PP) Number 78 of 2015 concerning Wages. The amount of the wage increase is based on the inflation rate and economic growth.