2019 Minimum Wage Forecast

On 15 October 2018 Minister of Manpower issues Circular Letter No. B.240/M-Naker/PHISSK-UPAH/X/2018 on the Submission of Data about the National Inflation Rate and Gross Domestic Product Growth of 2018.

The Circular Letter stipulates that Governors should set 2019 minimum wage in accordance with Government Regulation Number 78 of 2015 concerning Wages (PP No. 78 of 2015). Also, Governors are obliged to announced the 2019 provincial minimum wage (UMP) on 1 November 2018. Further, it stipulates that Governor can (not oblige) set and announce municipal minimum wages (UMK) for each district/city under their province no later than 21 November 2018.

In accordance with Government Regulation No. 78 of 2015, minimum wage increment should equal with inflation rate and national economic growth. The numbers come from the Central Statistics Agency, which is in 2019 amounted to 2.88% of inflation rate and 5.15% of economic growth. Thus, minimum wage in 2019 according to the Government Regulation in question is 8.03% (eight point zero three percent). This is lower than 2018 which is 8.71%.

Refer to the last three years, most probably the increament ranges between 7.5% to 12%.

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