The Relation Between Minimum Wages and Poverty in Indonesia: An Islamic Perspective


  • Ahmad Syarif Lecturer in Economics, Faculty of Islamic Economics and Business, IAIN Samarinda Kaltim
  • Wahyu Hadi Wibowo Student on Graduate Program, Center for Religious and Cross-cultural Studies, Concentration on Islamic Economy Graduate School (SPs), Universitas Gadjah Mada, Yogyakarta, Indonesia



Minimum Wage, Poverty Rate, Dynamic GMM


This study is part of Islamic economics research that aims to determine the relationship between the minimum wage and poverty rate in Indonesia, especially case studies in West Java, Central Java, East Java, Special Region of Yogyakarta, and Banten during the period 2007-2013. In addition to the primary independent variable, there are six control variables are used, the level of education, the GDP per capita, unemployment rate, inflation rate, average wages and economic growth. The analysis technique used in this study are Arellano Bond Dynamic GMM (Generalized Method of Moment). The results of this study found that the minimum wage is not a significant effect on poverty levels in 2007-2013, especially in the districts/cities in West Java, Central Java, East Java, Special Region of Yogyakarta and Banten. Based on the explanation above, it can be concluded that government has responsibilities and sufficient role to reduce poverty through minimum wage standardization, the state also has responsibilities to create social security, both for those who are unable to work, informal workers and vulnerable workers, so that the level of wages (income) they can meet any basic needs according to Ibn Hazm include food, clothing, health, education and housing.

Abstract viewed: 550 times | PDF downloaded = 387 times


Addison, J.T., dan Blackburn, M. L., 1996, “Minimum Wages and Poverty”, Mimeograph, University of South Carolina

Alaniz, E. Gindling, T. H., dan Terrell, K., 2011, “The Impact of Minimum Wages to Wages, Work and Poverty in Nicaragua”, IZA Discussion Paper, No. 5702

Badan Pusat Statistik, 2016 (

_________________, 2013, “Laporan Angkatan Kerja D.I. Yogyakarta 2013”

_________________, 2014, “Indikator Pasar Tenaga Kerja Jawa Barat 2014”

_________________, 2015, “Laporan Kesejahteraan Rakyat 2015”

Budiarty, I., 2015, “Dampak Ekonomi dan Kesejahteraan dari Upah Minimum di Indoensia”, Disertasi: Universitas Gadjah Mada

Card, David and Alan B. Krueger. 1995. Myth and Measurement: The New Economic of the Minimum Wage. Princeton, NJ: Princeton University Press

Chamid, N., 2010, Jejak Langkah & Sejaran Pemikiran Ekonomi Islam, Yogyakarta: Pustaka Pelajar

Chaudhry, M. S., 2012, Sistem Ekonomi Islam: Prinsip Dasar, Jakarta: Kencana

Gianie, 2009, “Pengaruh Upah Minimum Terhadap Penyerapan Tenaga Kerja

Berpendidikan Rendah di Sektor Industri dan Perdagangan”, Tesis:

Universitas Indonesia

Gindling, T.H., and Katherine Terrell. 2010. “Minimum Wages, Globalization and Poverty in Honduras”. World Development 38 (6), 908-918

Haneef, M. A., 2010, Pemikiran Ekonomi Islam Kontemporer: Analisis Komparatif Terpilih, terjemahan Suherman Rosyidi, Jakarta: Rajawali Pers

Iceland, J., Kenworthy, L., and Scopilliti, M., 2005, “Macroeconomic Performance and Poverty in the 1980s and 1990s: A State – Level Analysis”, Institute for Research and Poverty, Discussion Paper No. 1299-05

ILO., 2008, “Laporan Tren Tenaga Kerja dan Sosial di Indonesia Tahun 2008”

ILO., 2015, “Laporan Tren Tenaga Kerja dan Sosial di Indonesia Tahun 2015”

Kapelyuk, S., 2015, “Impact of Minimum Wage on Income Distribution and

Poverty in Russia”, Economics Education and Research Consortium, Working Paper No. 14/03

Kristanto, P. D., 2014, “Analisis Pengaruh Pertumbuhan Ekonomi, Upah Minimum, dan Tingkat Pengangguran Terhadap Jumlah Penduduk Miskin di Kebupaten Brebes Tahun 1997-2012”, Skripsi: Universitas Diponegoro Semarang

Lustig, N., dan Mcleod, D., 1996, “Minimum Wages and Poverty In Developing Countries: Some Empirical Evidence”, Brookings Disccusion Papers In International Economics, No. 125

Maloney, Tim., and Gail Pacheco. 2011. “Assesing the Possible Antipoverty Effects of Recent Rises in Age-Specific Minimum Wages in New