TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

21 companies to relocate factories from Karawang over high wages

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, November 14, 2018   /   12:07 pm
21 companies to relocate factories from Karawang over high wages The Karawang industrial estate in West Java (kompas.com/File)

Twenty-one companies will relocate their factories from Karawang, West Java to other regions on account of next year's minimum wage increase, an official has said.

“According to our records, between 2017 and 2018, 21 companies relocated their factories because they could not afford to pay wages,” said Karawang Manpower and Transmigration Agency head Ahmad Suroto said on Tuesday as quoted by kompas.com.

The current minimum wage in Karawang is Rp 3.92 million (US$266.13. The official said the Karawang Payment Council had decided to increase the minimum wage by 8.03 percent, as recommended by the Manpower Ministry, to Rp 4.23 million in 2019.

Because of the relocation of 21 factories, 22,000 workers would lose their jobs, he said, adding that he had been informed that five garment companies also planned to relocate their factories in 2019.

The five garment companies currently employ about 9,000 workers, he added.

Suroto said he had tried to persuade the garment companies to stay, but they had argued that they could not afford to pay their workers. 

He expected the wage increases next year to affect more companies, particularly companies that manufactured textiles, clothing and leather products, most of which were small and medium enterprises. (bbn)