DENPASAR, BALINEWS — Workers and university students have urged Bali Governor Wayan Koster to set the province’s 2027 minimum wage at IDR 5.2 million per month, based on the region’s estimated decent living needs. Koster said he would review the proposal but warned that setting the minimum wage at that level could force businesses to close.
The demand was raised during a meeting between Koster and representatives of workers and students at the Bali Governor’s Office in Denpasar on Wednesday (Oct. 21, 2026).
The delegation called on the provincial government to exercise its discretionary authority to use the decent living needs (Kebutuhan Hidup Layak, or KHL) benchmark in determining the 2027 Provincial Minimum Wage (UMP). They argued that the current wage-setting formula would not adequately cover workers’ living expenses in Bali.
I Made Dewa Rai Budi Darsana, secretary of the Independent Workers Union Federation (FSPM), said the provincial government should set the minimum wage in line with Bali’s estimated KHL of IDR 5.2 million per month.
He said that under the wage-setting formula stipulated in Government Regulation No. 49 of 2025, the increase could amount to only around IDR 200,000. With the current provincial minimum wage at approximately IDR 3.2 million, the 2027 rate would reach only about IDR 3.4 million, leaving a substantial gap between wages and living costs.
“This is an opportunity for Governor Koster to improve the welfare of his people. So, when else will he do it?” Rai said after the meeting.
Rai cited Constitutional Court Decision No. 168 of 2025 as one of the legal grounds for the workers’ demand, arguing that the government should consider the decent living needs benchmark when setting minimum wages.
He added that workers in Bali faced not only everyday living expenses but also the costs associated with maintaining the island’s traditional customs and cultural practices.
Responding to concerns that higher minimum wages could burden micro, small and medium-sized enterprises (MSMEs), Rai said wages for workers at such businesses were not determined solely by the provincial minimum wage but could also be based on agreements between employers and employees.
Meanwhile, action coordinator Excel Bagaskara argued that Bali’s economic growth and worker productivity, which he said were consistently above the national average, had not translated into wages that adequately reflected workers’ living costs.
He also said that foreign direct investment (FDI) accounted for around 70 percent of investment in Bali, but argued that workers had not benefited proportionately from the island’s economic expansion.
“This means that workers in Bali are not benefiting from that economic growth,” Excel said.
Excel called on the provincial government to exercise its discretion to consider the KHL benchmark in determining the 2027 minimum wage. He said the existing formula, which takes into account economic growth, inflation and a specific index, would still produce an increase that fell short of workers’ needs.
In response, Koster said he would review Constitutional Court Decision No. 168 of 2025 and the provisions of Government Regulation No. 49 of 2025, including the possibility of taking the KHL benchmark into account when determining minimum wages.
Koster said he had instructed the Bali Regional Research and Innovation Agency (BRIDA) to conduct a study on the province’s 2027 minimum wage, as well as regency and municipal minimum wages and sectoral minimum wages.
Based on a preliminary simulation using the highest alpha coefficient of 0.9, Koster estimated that Bali’s provincial minimum wage could reach IDR 3.45 million in 2027, representing an increase of approximately 7.6 percent from the previous year.
However, he acknowledged that the projected figure remained relatively low. He said any wage increase needed to balance workers’ demands with businesses’ financial capacity to avoid placing excessive pressure on employers.
“In principle, the minimum wage can be increased further. However, if IDR 5.2 million is used as the basis, I think many companies will close. If many companies close, workers will lose their jobs. This must be taken into consideration,” Koster said.
He added that higher labor costs could increase production expenses and push up the prices of goods and services. For that reason, he said, wage adjustments should be discussed through a tripartite mechanism involving the government, employers and workers.
Koster said the findings of BRIDA’s study would serve as the basis for further discussions with the Wage Council and other relevant stakeholders. The discussions would aim to determine a minimum wage that addresses workers’ welfare while safeguarding business sustainability.
“I will use this as material for discussion so that a meeting can be held with the Wage Council and other relevant parties to establish a basis for determining the minimum wage,” he said.
The final amount of Bali’s 2027 provincial minimum wage has yet to be determined.
