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Employers insist on limited 2023 wage hike, warn of more mass layoffs
Business representatives have urged the government to retain the existing minimum wage formula that will result in a much-limited raise in 2023, opposing demands from workers for the government to return to its previous wage calculation.
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Factory fashions: Workers operate sewing machines at a garment factory in Bogor, West Java, in September 2018. The government wants Indonesia to be a top-five world textile producer by 2030, but several businesses in the industry have had to close amid tight competition. (Antara/Yulius Satria Wijaya)
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usiness representatives have urged the government to retain the existing minimum wage formula that will result in a much-limited raise in 2023, opposing demands from workers for a return to the previous wage calculation.
The Indonesian Employers Association (Apindo), along with other associations, warned that if its demand was left ignored, more waves of layoffs would be underway, exacerbating the alarming increase in job cuts that have occurred in the past few months.
The Indonesian Textile Association (API) reported more than 58,000 layoffs nationwide, while the Indonesian Footwear Association (Aprisindo) reported 25,700 nationwide between July and October this year. Representatives from the furniture sector have reported a similar trend as well.
Firms argued that economic projections would be bleak next year and too much of a hike in the minimum wage could add more of a burden to businesses already pressured by drops in demand and plummeting exports, hence they had to compensate with fewer working hours and a no-work-no-pay scheme to prevent layoffs.
“We reject changes to the Government Regulation (PP) 36/2021 formula. We demand the government to be consistent with rules it has introduced,” Anne Patricia Sutanto, head of the Permanent Committee for International Treaties at the Indonesian Chamber of Commerce and Industry (Kadin) told reporters on Wednesday.
Read also: Employers, workers still locked horns over 2023 minimum wage
In a matter of days, the government will announce the 2023 minimum wage figure for each region and regency, but employers and workers continue to lock horns over the increase for this year.
