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Jakarta governor's 5% minimum wage hike spurs business backlash

Indonesian employers threaten legal action after Baswedan overrides legally set increase

Commuters walk during rush hour at a train station in Jakarta.   © Reuters

JAKARTA --  A decision by Jakarta's governor to raise the region's minimum wage by 5.1% -- more than five times the increase set by law -- has met with resistance from business groups that warn of headwinds to foreign investment.

The monthly minimum wage in the Indonesian capital was set in November to rise by 0.85% to 4.45 million rupiah ($313) in 2022, based on legally prescribed calculations. But Gov. Anies Baswedan on Dec. 18 told reporters that increase was "insufficient" because it fell below the region's inflation rate.

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