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Jakarta Post

Layoffs could be massive following wage hike: Employers

  • Novia D. Rulistia

    The Jakarta Post

Jakarta   /   Thu, November 22 2012   /  10:11 am

The 2013 minimum wage set for workers in Jakarta is considered too high by employers, who fear that it may backfire as businesses consider a recruitment freeze.

An entrepreneur in the food and beverage sector, Adhi Lukman, said on Wednesday that the Rp 2.2 million (US$228) minimum wage for a single worker had persuaded him and his fellow businessmen to find a more affordable way to compensate for the high labor costs.

“The alternative we have in mind is to invest more in machinery to replace human workers. That way, employment opportunities will be limited, thus creating a new social problem,” said Adhi, chairman of the Indonesian Food and Beverage Association (Gappmi).

He said that in his industry, the significant wage hike would lead to a 4 to 5 percent increase in products’ basic prices. “That increase means higher selling prices. And every increase will ...