Indonesian labor unions propose 7.5-9.5% minimum wage hike for 2027

Indonesian labor organizations, led by the Confederation of Indonesian Trade Unions (KSPI) and the Labor Party, have proposed a minimum wage increase of 7.5% to 9.5% for 2027. The proposal utilizes Government Regulation Number 49 of 2026, incorporating national inflation, economic growth, and a specific index multiplier. Based on data from October 2025 to August 2026, which showed 3.20% inflation and 5.43% economic growth, the unions calculated a baseline national average increase of approximately 7.7%.

Union leaders plan to advocate for these figures through the Wage Council and constitutional channels. They also intend to hold phased demonstrations starting in October 2026 at provincial offices and governors' residences across Indonesia. Beyond wage hikes, the coalition is demanding the passage of the Labor Protection Bill, changes to outsourcing regulations, and an increase in severance pay minimums.

In separate regional fiscal developments, the Nunukan Regency has proposed a 2026 budget amendment facing a projected deficit of Rp 209.39 billion due to decreased revenue. Meanwhile, the Batang Regency has agreed on a 2026 budget amendment focused on physical infrastructure, also resulting in a deficit. At the national level, the Regional Representative Council (DPD RI) has proposed increasing regional transfers (TKD) to Rp 780 trillion in the 2027 state budget to bolster local fiscal capacity.