Sharing Development Solutions for an Emerging Indonesia
Minimum wage setting has neither protected
workers nor rewarded their productivity
Minimum wage increases are not
correlated with increases in cost of living.
Provincial Min. Wage vs CPI Inflation
Minimum wage increases are not
correlated with productivity
Provincial Min. Wage vs Labour Productivity
25
70
70
00
60
Changei nCPI (%) 2007-2013
20
20
30
40
50
50
10
0
0
20
40
60
Change in real minimum wage (%) 2007-2013
Source: Sakernas, World Bank calculations.
R² = 0.0809
Changein Value Added Per Worker (%)
2007-2010
20
15
10
10
5
Ф
-5
R² = 0.0124
-10
-15
80
100
-20
-10
-5
0 5
10
15
20
25
30
Change in Minimum Wages (%) 2007-2010
Source: Sakernas, World Bank calculations.
THE WORLD BANK I BANK DUNIA
Sharing Development Solutions
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