The government has issued new regulations on wages, namely Government Regulation Number 51 of 2023 concerning Amendments to Government Regulation Number 36 of 2021 concerning Wages.

"The increase in the minimum wage is a form of appreciation for our fellow workers who have contributed to our economic development," said the Minister of Manpower, Ida Fauziyah, through the Ministry of Manpower's Public Relations Press Release on Friday (10/11/2023).

Ida explained that the certainty of the minimum wage increase is obtained through the application of the Minimum Wage Formula in Government Regulation Number 51 of 2023, which includes three variables: Inflation, Economic Growth, and a Specific Index (symbolized as α).

The Specific Index, as intended, is determined by the Regional Wage Council by considering the level of employment absorption and the average/median wage. Additionally, other relevant factors related to labor conditions are also taken into consideration.

"With these three variables, the economic and labor conditions in a region are balanced so that the Minimum Wage to be determined can be one of the solutions to job certainty and business sustainability," she said.

With these provisions, Ida stated that there is a strengthening of the role of the Regional Wage Council, providing additional advice and considerations to the Regional Head in the implementation of the minimum wage, as well as the wage structure and scale in companies in their respective regions.

"The increase in the minimum wage can encourage an increase in the purchasing power of the community, which ultimately impacts the absorption of goods and services produced by entrepreneurs, leading to business growth and the opening of new job opportunities," she said.

Furthermore, according to Ida, with the wage regulations as stipulated in Government Regulation Number 51 of 2023, it will create business certainty for the business and industrial sectors.

Thus, the existence of this regulation is also expected to realize a fair wage system in companies, including the implementation of wage structures and scales.

"The implementation of wage structures and scales will motivate an increase in productivity and the performance of workers because workers will be paid based on their work output or productivity," she said.

She added that, in addition to the certainty of the minimum wage increase, boosting community purchasing power, and providing legal certainty for the business and industrial sectors, this new Wage Regulation aims to prevent disparities or wage gaps between regions.

"So, in terms of preventing disparities or wage gaps between regions, Government Regulation Number 51 of 2023 is better than previous wage regulations," she said.

Ida also stated that the regulation issued on November 10, 2023, coinciding with Heroes' Day, serves as the basis for determining the Minimum Wage for 2024 and onwards.

"Subsequently, we request Governors, Heads of Agencies responsible for labor, and Regional Wage Councils to carry out their duties in accordance with the mandate of this government regulation, and the determination of Provincial Minimum Wages (UMP) is to be set no later than November 21, and for District/City Minimum Wages (UMK) by November 30," she said.