DIGIVESTASI - The Indonesian Employers Association (Apindo) Criticizes 6.5% Minimum Wage Increase for 2025, The Indonesian Employers Association (Apindo) has expressed disappointment with the government’s decision to raise the Provincial Minimum Wage (UMP) by 6.5% for 2025. Apindo Chairperson Shinta Kamdani emphasized that the business community has always been open to discussions regarding such policies.

“We regret that input from the business sector was not considered in this decision. Apindo has been active and intensive in participating in discussions regarding the minimum wage policy,” Shinta stated in an official release on Saturday (November 30).

Shinta explained that Apindo had provided comprehensive input on the 2025 UMP increase, taking into account various factors such as economic conditions, business competitiveness, and labor productivity. However, she noted that this input did not appear to be a primary consideration in the government’s decision-making process.

Previously, Apindo recommended that the government adhere to Government Regulation (PP) No. 51 of 2023 on Wage Policy as the basis for calculating the 2025 UMP. The formula outlined in the regulation was deemed the fairest approach for both workers and employers.

According to Shinta, the 6.5% increase is too high, particularly for labor-intensive industries, as it could significantly raise labor costs and operational expenses for companies. Amid national economic challenges from global and domestic pressures, she warned that this increase might escalate production costs and undermine the competitiveness of Indonesian products in both local and international markets.

“This situation could trigger a wave of layoffs (PHK) and hinder the creation of new job opportunities,” Shinta added.

Apindo also stated that it is awaiting an official explanation and detailed rationale from the government regarding the basis for determining this wage increase.

“We urge the government to provide a more detailed explanation and consider input from the business community to ensure the effective and sustainable implementation of this policy,” Shinta concluded.

Earlier, President Prabowo Subianto announced the 6.5% UMP increase for 2025 during a statement from the Presidential Office.

“The Minister of Manpower proposed a 6% increase. However, after discussions and meetings with labor union leaders, we decided to raise the average national minimum wage to 6.5%,” Prabowo stated.