Involvement International Journal of Business
Vol. 2 No. 4 (2025): October 2025

Do Minimum Wages Reduce Poverty? A Case Study of Palangkaraya City

Harati, Rima (Unknown)



Article Info

Publish Date
17 Oct 2025

Abstract

This study examines the impact of the regional minimum wage on poverty levels in Palangkaraya City from 2010 to 2024. The goal is to determine whether an increase in the minimum wage reduces poverty in the region. A simple linear regression model was used to analyze the effect of the regional minimum wage (independent variable) on poverty (dependent variable). Secondary data on the regional minimum wage and poverty rates were sourced from the Palangkaraya City Central Statistics Agency (BPS). Classical assumption tests, including normality, multicollinearity, and heteroscedasticity tests, were conducted to validate the regression model. The regression analysis found a significant negative relationship between the regional minimum wage and poverty in Palangkaraya City (coefficient = -6.080E-7, t = -5.561, p < 0.05). The normality and multicollinearity tests met the required assumptions, while heteroscedasticity was detected in the model. The study confirms that an increase in the regional minimum wage can significantly reduce poverty in Palangkaraya City. However, the presence of heteroscedasticity suggests that further model refinement is needed. Future research should focus on improving model accuracy and expanding the scope to include other factors influencing poverty.

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Journal Info

Abbrev

iijb

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

Authors are invited to contribute original research on a wide range of topics including financial management, marketing strategies, human resource management, entrepreneurship and innovation, international business, supply chain management, corporate governance, economics and business environment, ...