If the UMP 2023 increases by 10%, here is the simulation

Information:

MU(t+1) = minimum wage to be determined
UM

Meanwhile, the adjustment to the above MU value is calculated as follows:

MW value adjustment = inflation + (PE x α)

Information:

MW value adjustment = minimum wage value adjustment which is the sum of inflation times economic growth and α
Inflation = provincial inflation calculated from the September period of the previous year to the September period of the current year (in percentage)
PE = calculated economic growth
α = the form of a certain index describing the contribution of labor to economic growth with a certain value within a certain range, i.e. 0.10 – 0.30.

In addition to calculating the latter formula, the government also sets an upper limit for the minimum wage increase in 2023, i.e. the adjustment for the MW value cannot be more than 10%.

So roughly what will the 2023 provincial minimum wage (UMP) be for the provinces that have the most labour-intensive industries, if it increases by 10%?

Check the simulation as follows:

1. DKI Jakarta

As it is known, UMP DKI Jakarta for 2022 is IDR 4,573,845. So, if you try it with a maximum percentage increase of 10% as an increase in the amount of the UMP DKI Jakarta, the calculation is as follows:

UM(t+1) = 4,573,845 + (10% x 4,573,845)
UM(t+1) = 4,573,845 + 457,385
CU(t+1) = 5,031,230

When calculated using a formula for a maximum increase of 10%, the DKI Jakarta UMP 2023 will be IDR 5,031,230.

2. Central Java

It is known that the UMP for Central Java in 2022 is IDR 1,812,935. So, if you test this with a maximum percentage increase of 10% as the increase amount in Central Java UMP, the calculation is as follows:

MU(t+1) = 1,812,935 + (10% x 1,812,935)
CU(t+1) = 1,812,935 + 181,294
CU(t+1) = 1,994,229

When calculated using a formula for up to 10% increase, the UMP for Central Java in 2023 will be IDR 1,994,229.

3. West Java

It is known that West Java’s UMP for 2022 is IDR 1,841,487. So, if you test this with a maximum percentage increase of 10% as the amount of West Java UMP increases, the calculation is as follows:

MU(t+1) = 1,841,487 + (10% x 1,841,487)
MU(t+1) = 1,841,487 + 184,149
UM(t+1) = 2,025,636

When calculated using a formula for a maximum increase of 10%, the UMP for West Java in 2023 will be IDR 2,025,636.

4. East Java

The UMP for East Java in 2022 is known to be IDR 1,891,567. So, if you test this with a maximum percentage increase of 10% as an increase in East Java’s UMP, the calculation is as follows:

UM(t+1) = 1,891,567 + (10% x 1,891,567)
UM(t+1) = 1,891,567 + 189,157
CU(t+1) = 2,080,724

When calculated using a formula for a maximum increase of 10%, the UMP for East Java in 2023 will be IDR 2,080,724.

5. Banten

It is known that the UMP Banten in 2022 is IDR 2,501,203. So, if you try this with a maximum percentage increase of 10% as the Banten UMP increase amount, the calculation is as follows:

UM(t+1) = 2,501,203 + (10% x 2,501,203)
UM(t+1) = 2,501,203 + 250,120
UM(t+1) = 2,751,323

When calculated using a formula for a maximum increase of 10%, the Banten UMP in 2023 will be IDR 2,751,323.

6. North Sumatra

It is known that North Sumatra’s UMP for 2022 is IDR 2,522,610. So, if you test this with a maximum percentage increase of 10% as the increase amount in the UMP of North Sumatra, the calculation is as follows:

MU(t+1) = 2,522,610 + (10% x 2,522,610)
UM(t+1) = 2,522,610 + 252,261
MU(t+1) = 2,774,871

If calculated using the formula for a maximum increase of 10%, the UMP of North Sumatra for 2023 will be IDR 2,774,871.

However, please note that the above calculation is a rough calculation that is done using a new formula of a maximum UMP increase of 10%. The final decision on the amount of the UMP 2023 increase rests with the respective provincial administrations.

[Gambas:Video CNBC]