TEMPO.CO, Jakarta - The Indonesian Chamber of Commerce and Industry (Kadin) chairperson Arsjad Rasjid suggested the government formulate a minimum wage policy in accordance with current industrial conditions. He opined that the policy needs to be more targeted in line with economic growth and the character of each sector.

“The minimum wage policy should be accompanied by the distribution of incentives for certain industries that are right on target according to sectoral conditions,” said Arsjad in a written statement, Tuesday, November 22, 2022.

The policy on minimum wage, he emphasized, must be fair as it is not burdensome to business actors and not detrimental to workers. Because, said Arsjad, the two are inseparable cycles of economic growth.

Reflecting on the country’s economic growth in the third quarter of 2022, Arsjad went on, the cumulative growth of the textile industry grew by 11.38 percent compared to the food and beverage industry which only grew 3.66 percent. However, the slowdown in export demand by 30 to 50 percent also caused the garment sector to recently decide to perform layoffs.

“Export performance fell 10.99 percent in September this year to US$24.8 billion compared to the previous month. As a result, the labor-intensive industrial sector as support for employment in Indonesia has become sluggish due to declining demand,” he explained

Additionally, global economic challenges triggered by geopolitical conflicts have continued to trigger a spike in inflation. “As the weakening global economy will continue next year, we hope that the wage increase policy will be accompanied by incentives for industries affected by the global economic turmoil, such as labor-intensive and export-oriented industries,” Arsyad pinned hopes.

On Saturday, November 19, 2022, the Manpower Ministry issued a Ministerial Regulation (Permenaker) No. 18 of 2022 on the minimum wage for 2023, announcing that the hike in the minimum wage must not exceed 10 percent.

RIANI SANUSI PUTRI

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