Manpower Minister Ida Fauziyah: Vocational Education is Contributing to Unemployment

TEMPO.CO, Jakarta - Manpower Minister Ida Fauziyah explains the issues surrounding the mass layoffs in the industrial sector.

Minister of Manpower Ida Fauziyah, 55, has received over 4,000 labor complaints amid a wave of layoffs in the textile and manufacturing industries up to mid-2024. Ida noted that some cases could be resolved through mediation, but many have proceeded to court.

Mass layoffs are on the rise, particularly in the textile industry. According to the Confederation of Indonesian Labor Unions, 13,800 workers in the textile sector have been laid off since the beginning of 2024. Data from the Central Java Textile Association shows that 15,000 workers lost their jobs due to the closure of 10 factories. “They carried out efficiency measures and could not compete with imported products,” Ida said in a special interview via video conference on Saturday, August 10.

Ida, who also serves as the Deputy Chair of the National Awakening Party (PKB), said she could not guarantee that the wave of layoffs would subside. According to her, the situation depends on the global economy. “What can be done is to anticipate by providing safety nets for workers,” she told Tempo reporters Raymundus Rikang, Praga Utama, and Yosea Arga Pramudita.

Over one hour, Ida also shed light on vocational education that does not fit industry needs, which results in many vocational graduates ending up unemployed. During the interview, she was accompanied by Indah Anggoro Putri, Director-General for Industrial Relations and Social Security, and Agatha Widianawati, Head of Legal Affairs and International Cooperation, who helped Ida explain, particularly on lawsuits by retrenched workers on several occasions.

For over an hour, Ida also discussed the mismatch between vocational education and industry needs. As a result, many graduates of vocational programs are unemployed. Ida was accompanied by the Director-General of Industrial Relations and Social Security, Indah Anggoro Putri, and the Head of the Legal Affairs and International Cooperation Division, Agatha Widianawati. Both assisted Ida in providing explanations, particularly regarding labor lawsuits related to layoffs.

Layoffs continue to occur across various industry sectors. What are the causes?

There are several issues. First, many textile companies are implementing efficiency measures, and some are closing down. These companies are unable to compete with or lose out to cheaper imported products. Plummeting domestic and international sales exacerbated the situation. Changes in domestic sales patterns and textile consumption are also affecting the situation.

What about complaints from business owners?

Business owners are requesting restrictions on imports from certain countries. They also ask the government to promote the consumption of domestic products. From the workers’ perspective, they naturally do not want layoffs, so we continue to facilitate mediation.

What is the solution?

In cabinet meetings, President Joko Widodo has expressed concern about the high number of layoffs in the textile industry. The President has stated that there needs to be a strengthening of the domestic industry, including micro, small, and medium enterprises. This involves massively promoting domestic products and enforcing laws against illegal imports.

How can our products compete with regulations from the Trade Ministry that relax import restrictions?

This is indeed a policy that cannot be addressed by the Manpower Ministry alone. The request to limit imports has been taken up and is under the jurisdiction of the Trade Ministry.

Is there any message from President Jokowi for you?

We are the ministry affected by these issues. We focus on labor policies or mitigation. Mediation, dialogue, and efforts to bring employers and workers together fall within our scope. Beyond that, the President has asked other ministries and agencies to also help mitigate the risks of increased layoffs.

How can layoffs be prevented?

Before companies implement efficiency measures or even close factories, they usually contact us and request mediation with workers’ representatives. Layoffs are a last resort when employment issues arise, so preventive measures from all parties are necessary. We must avoid allowing layoffs to result in increased unemployment.

Amid mass layoffs, how are companies compliance with workers’ rights?

Indah Anggoro: In the textile sector, up until now, there have been no disputes that cause problems. However, we have recorded 4,600 labor disputes, mostly related to industrial relations due to layoffs. We encourage resolving these disputes through mediation. Nevertheless, many cases still end up in industrial relations courts due to a lack of agreement.

Where does the government stand when disputes occur? With companies or workers?

That’s the importance of the government, as it must always be in the middle and act as a bridge to reconcile the interests of workers and companies. Although personally I tend to be closer to workers, I must remain neutral.

Until when will these layoffs continue?

It greatly depends on the global situation, which is extraordinarily dynamic. Our ability to anticipate may be slower compared to the rate of changes in the situation. If the global market conditions remain as they are, we cannot guarantee when this situation will improve. What can be done is to anticipate by providing safety nets for workers

Read the Full Interview in Tempo English Magazine