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Do you know that the government announces a hike in the Provincial Minimum Wage (UMP) on an annual basis? The rise in UMP 2025 is going to be set on November 21, 2024, or one month after the inauguration of President Prabowo Subianto.
Annually, UMP is defined on November 21, and the National Wage Council has held a series of meetings to discuss the increase.
The wage scheme adheres to Government Regulation Number 51 of 2023 (PP No. 51 of 2023) on the Amendment to Government Regulation Number 36 of 2021 on Wages.
There has been no information about whether the regulation on defining UMP is going to be amended. If no amendment is made, PP No. 51 of 2023 applies.
UMP is often set in each sector and region. However, the UMP in each region is different depending on several factors. What are those factors? How is UMP calculated? Continue reading to find out more.
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The first factor is the Standard Cost of Living (KHL). This standard is related to a worker’s monthly physical, non-physical, and social needs (Law Number 13 of 2003).
UMP is also set based on the price of basic needs, as reflected in the Consumer Price Index (IHK).
According to Statistics Indonesia (BPS), IHK represents the average change in the price of a package of goods and services consumed by a household during a particular period.
It is one of the important indicators of the economy in a region.According to BPS, PDRB is the total value added of goods and services made by various production units in a country during a particular period (usually one year).
The three factors above are the basis for defining UMP. As each region or province has different variables, the calculation of those three factors produces different results.
Under PP No. 51 of 2023, 3 variables determine the annual rise in wages. Those variables are economic growth, inflation, and particular index.
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According to Article 26 paragraph (4) of PP No. 51 of 2023, the wage is equal to the minimum wage for the current year plus wage adjustment for the following year.
Then, Article 26 paragraph (5) emphasizes that wage adjustment value for the following year is equal to inflation plus the multiplication result of economic growth and given index, then it is multiplied by the minimum wage for the current year.
So, according to the PP, the formula for calculating an increase in UMP 2025= inflaton + (economic growth X given index).
The inflation is the provincial inflation calculated from September of the previous year to September of the current year (in percentage terms).
Meanwhile, a particular index shows manpower’s contribution to economic growth at 0.10-0.30.
Those are information and factors determining the increase in UMP 2025, which will be defined soon. You can try to calculate and predict the hike in UMP next year.
However, the calculation can only be used to predict; it is not a standard because the government makes real calculations.
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The government sets UMP as the minimum wage employees earn to meet their needs.
However, the amount of salary depends on the condition and profile of a company. When applying for a job, you should make sure that a company has a good image and clear career paths. Choose a reputable and credible company in its field, such as PT Serasi Autoraya or SERA.
Founded on March 22, 1990, it has become the leader in Indonesia’s transportation and logistics industry. Every year, this Astra Group's company welcomes new members to fill various positions at the company.
SERA continues to provide opportunities for individuals qualified for positions at the company and its subsidiaries.