Batam, gokepri – The Riau Islands province is bracing for a proposed 6.5% increase in its minimum wage for 2025, lifting the figure to Rp3.6 million per month. This modest adjustment, based on Indonesia’s new labor regulation, Permenaker No. 16/2024, signals a departure from older calculation models in favor of a more standardized formula. Yet, while this rise aligns with national directives, it has left both workers and employers with mixed reactions.
At the provincial level, officials are confident the hike strikes a fair balance. Mangara Simarmata, head of the local manpower office, said the proposal will soon be forwarded to the governor for formal approval. “This increase aligns with careful studies conducted by the Ministry of Manpower,” he noted, adding that the wage will serve as a floor for provincial labor rates. District-level wages, meanwhile, will be discussed separately.
Yet, the proposed hike has triggered mixed reactions. While the increase of Rp221,161, from the 2024 UMP of Rp3,402,492, represents an improvement, it falls short of expectations, especially from labor unions.
Workers’ unions are less optimistic. The Federation of Indonesian Metal Workers (FSPMI) criticized the 6.5% adjustment as insufficient to counter rising living costs. They are demanding a 9.92% increase, which would set the minimum wage at Rp3.74 million. “Prices for basic goods have surged, and this adjustment does little to help,” argued Yafet Ramon, the union’s local chairperson, citing examples like food costs that now rival those in major cities.
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Businesses, however, welcome the restrained hike. Employers’ associations have pushed back against the union’s demands, warning of potential risks to small and medium enterprises already grappling with sluggish economic growth.
The debate mirrors broader tensions nationally. President Prabowo Subianto’s recent decision to raise Indonesia’s average minimum wage by 6.5% aims to offer a safety net for the country’s lowest-paid workers, particularly those with less than a year of employment. While slightly above the labor minister’s recommendation of 6%, the measure is seen as a calibrated response to competing pressures: appeasing workers without overburdening businesses.
At the provincial level, the wage proposal also seeks to bridge economic disparities. Districts such as Lingga and Tanjungpinang, where living costs and wage calculations remain below provincial norms, will adopt the new provincial minimum. This ensures no region falls behind, albeit at the cost of diluting the wage hike’s local purchasing power in high-cost areas.
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The governor of the Riau Islands is expected to finalize the new wage policy by December 11, 2024, with district-specific rates following a week later. Both will take effect on January 1, 2025. Yet the gap between labor and employer expectations signals that wage debates in the region are far from settled.
For now, the 6.5% increase represents an attempt to walk a tightrope—offering incremental relief for workers while ensuring businesses remain afloat. Whether this is enough to satisfy either side remains to be seen. As the cost of living creeps up and economic pressures mount, it is clear that neither unions nor employers are entirely happy.
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