Rejecting Provocative Labor Demonstrations, the 2026 Provincial Minimum Wage Increase Is a Government Commitment to Maintaining Workers’ Purchasing Power and Economic Stability

By: Maya Anggina Putri )*
The policy of setting the 2026 Provincial Minimum Wage (UMP) should be placed within the broader framework of the state’s commitment to safeguarding workers’ welfare while ensuring national economic stability. Amidst a dynamic global economy that has not yet fully recovered and complex domestic challenges, the government is taking a realistic and measured approach in formulating wage policy. The 2026 UMP increase is not merely an administrative decision, but rather a strategic instrument to maintain workers’ purchasing power, strengthen household consumption, and maintain a conducive business climate. In this context, provocative calls for demonstrations have the potential to obscure the substance of the policy and harm workers’ interests.
The government has consistently emphasized that wage policy must ensure a balance between worker protection and business sustainability. This approach is crucial given that the employment sector is inseparable from a healthy investment climate and stable industrial relations. The central government, through the latest wage regulations, provides space for social dialogue and regional flexibility so that the UMP determination reflects the real economic conditions of each region. Therefore, workers’ aspirations are still guaranteed, but are expected to be expressed through constructive dialogue, rather than through mass mobilization that could potentially disrupt social and economic stability.
The establishment of the 2026 Provincial Minimum Wage (UMP) in Jakarta at Rp5,729,876 per month reflects the regional government’s concrete commitment to safeguarding the welfare of urban workers. This increase of approximately 6.17 percent compared to the previous year demonstrates the government’s efforts to align wages with evolving living costs. Jakarta Governor Pramono Anung explained that the determination was made based on government regulations on wages, following in-depth discussions at the Regional Wage Council, which took inflation, economic growth, and productivity into account. The use of an alpha index of 0.75 was chosen to ensure that wage increases remain above the inflation rate, thus maintaining workers’ real purchasing power.
The Jakarta UMP policy is also complemented by various non-wage incentives that strengthen workers’ economic protection. The regional government includes support in the transportation, food, and health sectors as part of a comprehensive approach to improving welfare. The Jakarta Worker Card program, which provides free public transportation access for workers earning up to 1.15 times the UMP, is a concrete example of how public policy is directed at directly reducing workers’ living costs. This step demonstrates that the government is not solely focused on wages, but also on the overall quality of life for workers.
Support for the 2026 minimum wage (UMP) increase also came from the legislative branch. Ade Suherman, a member of the Jakarta Regional People’s Representative Council (DPRD) from the Prosperous Justice Party (PKS) faction, viewed the UMP increase as a signal of the government’s commitment to workers amidst economic challenges. He emphasized the importance of synergy between the regional government and the business sector to ensure wage increases do not lead to limited job opportunities. He believes that striking a balance between worker protection and business sustainability is key to ensuring wage policies provide long-term benefits for all parties.
A similar view was expressed by Deputy Speaker of the Jakarta DPRD, Rany Mauliani, who views the UMP increase as part of a gradual process of improving public welfare. She believes that the sustainability of the wage policy demonstrates the regional government’s commitment to maintaining workers’ living standards while still considering fiscal capacity and regional economic conditions. This optimism is supported by improving economic trends and increasing fiscal space to expand social protection for workers.
At the national level, Heru Tjahjono, a member of Commission IX of the Indonesian House of Representatives (DPR RI) from the Golkar Party faction, emphasized that the determination of the 2026 Provincial Minimum Wage (UMP) must be based on Government Regulation Number 49 of 2025 concerning Wages, which emphasizes a spirit of togetherness between the government, workers, and the business world. He believes that the UMP should not be understood merely as a number, but rather as a reflection of realistic and equitable regional economic conditions. A proportional increase in the UMP is believed to boost public purchasing power and have a multiplier effect on the MSME sector and local trade, as long as it is balanced with increased productivity.
From a business perspective, Diana Dewi, Chairperson of the Jakarta Chamber of Commerce and Industry (Kadin), reminded that business certainty is a shared interest, including for workers. She believes that demonstrations demanding excessive wage increases have the potential to disrupt the investment climate and restrict business expansion. When businesses face cost pressures,Amidst global uncertainty, stability is crucial for companies to survive and absorb labor. In such conditions, workers are the most vulnerable if business activities are disrupted.
The establishment of the 2026 Provincial Minimum Wage (UMP), which has been implemented in most provinces, demonstrates the government’s active presence in maintaining a balance of interests. The government, through the Ministry of Manpower, also emphasized that wage policies are accompanied by various supporting programs, such as holiday assistance, social security contribution discounts, and increased unemployment benefits. This step reinforces the message that workers’ welfare is inseparable from national economic stability.
Therefore, rejecting provocative demonstrations that obscure the substance of the UMP policy is a rational and responsible stance. The 2026 UMP policy was designed through dialogue, data, and comprehensive consideration to maintain workers’ purchasing power while ensuring business continuity. Maintaining stable industrial relations will be a crucial foundation for inclusive and sustainable economic growth, where workers, employers, and the state move in the same direction for the common good.
*The author is a Public Policy Analyst