24 Indonesian Provinces Have Set New Regional Minimum Wage for 2014
Per 14 November 2013, 24 Indonesian provinces have confirmed their new provincial minimum wage for the year 2014. As Indonesia numbers 34 provinces in total, 10 more provinces are expected to announce their new minimum wages soon. It is interesting to note that of the 24 provinces that have already published the new minimum wage, 11 provinces have set the minimum wage below the assumed need for decent living in the province, which implies that the minimum wage is not enough to finance a person's minimum monthly basic needs.
The provincial minimum wages are only applied to unmarried people who have been working less than one year. For those that are married and have been working longer than one year, the salary should be raised based on an agreement between the worker and the company.
2014 Minimum Wages of 24 Indonesian Provinces:
| Province | Minimum Wage IDR |
Minimum Wage Growth (yoy, %) |
Minimum Decent Living IDR |
| Central Kalimantan | 1,723,970 | 11.00 | 2,087,000 |
| West Kalimantan | 1,380,000 | 30.19 | 1,701,665 |
| Jambi | 1,502,230 | 15.56 | 1,502,230 |
| Southeast Sulawesi | 1,400,000 | 24.42 | 1,472,581 |
| West Sumatra | 1,490,000 | 10.37 | 1,465,690 |
| Bangka Belitung | 1,640,000 | 29.64 | 1,802,823 |
| Papua | 1,900,000 | 11.11 | 1,907,000 |
| Bengkulu | 1,350,000 | 12.50 | 1,260,000 |
| Nusa Tenggara B. | 1,210,000 | 10.00 | 1,410,294 |
| Banten | 1,325,000 | 13.25 | 1,325,000 |
| South Kalimantan | 1,620,000 | 222.12 | 1,555,000 |
| DKI Jakarta | 2,441,000 | 10.95 | 2,299,860 |
| Riau Islands | 1,665,000 | 21.97 | 1,665,000 |
| North Sumatra | 1,505,850 | 9.52 | 1,265,000 |
| East Kalimantan | 1,886,315 | 7.66 | 1,886,315 |
| Riau | 1,700,000 | 21.43 | 1,654,224 |
| Aceh | 1,750,000 | 12.90 | 1,726,515 |
| Central Sulawesi | 1,250,000 | 25.63 | 1,292,817 |
| Moluccas | 1,415,000 | 10.98 | 2,158,469 |
| South Sumatra | 1,825,600 | 12.00 | 1,828,698 |
| Gorontalo | 1,325,000 | 12.77 | 1,639,272 |
| South Sulawesi | 1,800,000 | 25.00 | 1,760,000 |
| West Papua | 1,870,000 | 8.72 | 2,122,472 |
| North Sulawesi | 1,900,000 | 22.58 | 1,466,472 |
Source: Investor Daily
Last month, widespread demonstrations took the streets as workers demanded for higher minimum wages after high inflation (8.32 percent yoy in October 2013) had significantly reduced their purchasing power. However, higher minimum wages can also backfire when companies have to cut production expenses or relocate to a different country where wages are lower. Armida Alisjahbana, Head of Bappenas, said that 44 thousand Indonesian workers have been fired in the first six months of 2013 due to slowing economic growth in combination with higher minimum wages in 2013. Given that the Indonesian economy continues to slow down and minimum wages will go up again in 2014, more layoffs can be expected. Most vulnerable workers are those in the textile, garment, and shoe industries.
2013 Minimum Wages in Asia:
| Country | Minimum Wage |
| Japan | IDR 21,263,618 |
| South Korea | IDR 10,431,410 |
| Hong Kong | IDR 8,420,330 |
| Taiwan | IDR 5,852,042 |
| Philippines | IDR 3,255,076 |
| Thailand | IDR 2,818,409 |
| China | IDR 2,522,672 |
| Indonesia | IDR 2,200,639 |
| Vietnam | IDR 923,300 |
| Camboja | IDR 592,981 |
Source: Investor Daily