Abstract
The purpose of this research was to find out the effect of the percentage in development of Pematangsiantar city’s regional minimum wages, and the problem in this study how GRDP and RWP affect on the percentage of development of Regionl Minimum Wage at Pematangsiantar City. The method used was quantitative descriptive analysis. Data analysis used were Classic Assumption Test, Multiple Linear Regression, Correlation Coefficient, Determination, F-test and t-test object on RMW at Pematangsiantar city. Finding of research and results of the study can be summarized as follows: 1). The results of the multiple linear regression analysis test are that the GRDP and RWP had a positive effect on the RMW of Pematangsiantar City, 2). The results of the correlation coefficient indicate that the GRDP and RWP of Pematangsiantar City on its RMW were at a very strong level, while the coefficient of determination of 67.5% at high or low of the minimum wages can be explained by the GRDP and RWP, while the remaining of 32.5% was influenced by other factors which were not included in this study, 3). Hypothesis Test for F-test indicates that the GRDP and RWP influences significantly on Pematang city’s RMW, and for the t- test indicates that the GRDP and RWP had a positive and significant effect on the RMW in Pematangsiantar City from 2005 to 2018. This means that as the GRDP increases, the value of setting Pematangsiantar City's minimum wage in the following year will also increase, and vice versa. The increase of laborers/workers demands will affect the standard of regioanalwages that will be determined, this happens because wages will always adjust to the labor market demand. The stipulation of the minimum wage, it has an impact on GRDP in Pematangsiantar City, because the consumptive rate will be carried out in the place where it gets paid.
Highlights
National development is a process in improving the standard of living of the Indonesian people by following the objectives stated in the Preamble to the Constitution of the Republic of Indonesia
While the coefficient of determination (R square) of 0.675, which means 67.5% of high and low minimum wages can be explained by the gross regional domestic product (GRDP) and Rate of Workforce Participation (RWP)
From the results of the study that have been described, it can be concluded that the GRDP and RWP have a positive effect on the regional minimum wage of Pematangsiantar City from 2005 to 2018 year
Summary
National development is a process in improving the standard of living of the Indonesian people by following the objectives stated in the Preamble to the Constitution of the Republic of Indonesia. One way to improve the standard of living of the nation is to prosper the community. Public welfare is a condition in which the material, spiritual, and social needs of the country’s population are fulfilled to live properly and be able to develop themselves, so they can carry out social and economic activities. Poverty is a condition where the community cannot meet the basic needs of life. Efforts to reduce poverty must be carried out comprehensively, cover various aspects of community life, and be implemented in an integrated manner (Yusnedi, et al, 2019).
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