The majority of Indonesia’s 34 provinces have announced their 2016 wage increases (included in the chart below). The new wage regulation continues to authorize governors to set minimum wages for their provinces, whether utilizing the national inflation rate method or its permissible substitute, the Decent Living Standard (KHL) index. Governors using the former method raised rates by 11.5% while those making adjustments using the KHL measurements were mostly higher. In the end, most governors increased wages within the 9-12% threshold Cascade Asia forecasted.
There has been a bout of protests organized by unions in and around Jakarta since the provincial wage levels were announced. The successful confrontation and containment of these protests by police, not seen under the previous administration, bodes well for managing any labor unrest amid continued reforms.
On the Horizon
- December 9, 2015 – Public holiday for regional elections
- December 10, 2015 – International Human Rights Day
- December 24, 2015 – Public holiday for Muhammad’s Birthday (Maulidur Rasul)
- December 24, 2015 – Public holiday for Christmas Day
- January 1, 2016 – New wage levels go into effect
- January 1 – 3, 2016 – Public holiday for New Year’s Day