This research aims to examine the effect of wages differentiation on employments. The policies of wages differentiation are observed from minimum sector wages which is still done in some provinces. The differentiation itself is aimed to exhaust the customerâ€™s surplus. The research shows that the more wages differentiation the more employments will be offerÂ¬ed. But, unfortunately some provinces still set high minimum sector wages. This case will cause negative effect on empowerment, and on the other hand in limited formal manufacturÂ¬ing inÂ¬dustries will reduce the gap of distribution of value added between the employers and the workers.
Keywords:Â wage differentiation, employment, industry, and region studies