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Wage hikes, low productivity hamper industry: Kadin
Increasing wage demands by trade union activists over the last few years have not reflected increases in workforce productivity because the country’s education system is largely disconnected from industrial demand, a businessman has said.
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Thousands of workers hold a rally before the State Palace in Central Jakarta in February. (JP/DON)
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ncreasing wage demands by trade union activists over the last few years have not reflected increases in workforce productivity because the country’s education system is largely disconnected from industrial demand, a businessman has said.
Indonesia Chamber of Commerce and Industry (Kadin) vice chairman Benny Soetrisno said on Thursday that employers were in a difficult position as local leaders such governors, mayors and regents mostly supported the position of workers because they wanted to ensure their re-election and needed the support of workers to accomplish this.
The effort to boost the manufacturing sector is hindered by problems in human resources, increasingly uncontrollable minimum wages and productivity that is not appropriately aligned with proposed salary hikes, Benny said at a Bank Indonesia-Indonesian Economist Association (ISEI) seminar at the offices of Bank Indonesia on Thursday.
The sharp difference in minimum wages among neighboring regions is another problem, Benny said, citing the Rp 1 million gap between Surabaya and Sidoarjo in East Java.
He said in trying to increase productivity, the government planned to train its workforce with vocational education, following the German model.
"However, Germany’s system cannot be slavishly imitated due to the cultural differences. A German diplomat said his country supported the program, but he was also confused about what kind of vocational education his country should give to Indonesia," Benny continued.
Around 1995, then vice president B.J. Habibie introduced a “link and match” program to fulfill industrial requirements, but the program was not implemented. (bbn)
