The policy to increase employee minimum wages in early 2024, as stated in Government Regulation no. 51 of 2023, has generated various views from representatives of industry players, especially from the manufacturing sector in Indonesia.
Shinta W. Kamdani, General Chair of the Indonesian Entrepreneurs Association (Apindo), underlined the importance of respecting government decisions as the legal basis for business activities in Indonesia. However, Apindo highlighted the need to determine an economic growth index by the Wages Council which takes into account economic and employment conditions in various regions.
Shinta emphasized the importance of the spirit of unity in implementing the provincial minimum wage policy (UMP), viewing it as part of national economic development. He encouraged the importance of social dialogue through consensus deliberation to balance the various opinions that arise.
In terms of optimism regarding the performance of the manufacturing industry, Shinta stated the potential for positive growth until the end of 2023. However, she also reminded the importance of conducive political conditions, especially during the Presidential Election campaign, so that the industry can grow optimally without being disturbed by the uncertainty of the business climate.
On the other hand, Redma Gita Wirawasta, General Chair of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), emphasized that textile and textile product (TPT) producers are currently more focused on calculating risks related to reduced production and labor rather than calculating the impact of wage increases on business.
The textile industry is still facing major challenges, such as a decline in export demand and the entry of imported goods into the domestic market. Factors such as rising benchmark interest rates and the weakening of the rupiah are making things even more difficult for this sector. Despite this, the government's policy regarding reducing imports is still considered not to be running optimally, in fact the deadline has reached three months without significant implementation.
Redma also highlighted that throughout 2023, around 70,000 textile industry workers will be affected by employee rationalization. This has had a significant impact on the sector, with some employers even starting to consider factory closures as a responsive measure to the difficult conditions.
In conditions like these, the biggest challenge for the textile industry is to find the right solution to face external challenges while maintaining business continuity and employment in this sector.