Workers Getting Squeezed by New Wage Regulation


The government allows export-oriented companies to reduce workers' wages by up to 25 percent in certain labor-intensive industries affected by global economic changes, according to Manpower Regulation No. 5/2023. This regulation was enacted on March 7 and allows for wage adjustments to be determined by the government.

Article 7 specifies that certain export-oriented industries can lower workers' wages by at least 75 percent of their usual wage, subject to agreement between employers and laborers.

Such industries are allowed to adjust workers' wages by a minimum of 75 percent of their usual pay. However, employers and workers must agree upon such adjustments, which are only valid for six months.

Labor Party President Said Iqbal criticized the regulation, stating it is discriminatory and reveals the government's failure to understand the issue. He argued that this regulation contradicts President Joko Widodo's policy, which advocates for a fixed minimum wage for all.

According to him, the regulation is unfounded and represents the government's efforts to divide employers and workers. Workers are planning to protest against this regulation and demand its cancellation.

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