Home / Knowledge / News / Textiles / Demand for wage rise to affect Indonesian textile industry
Demand for wage rise to affect Indonesian textile industry
Nov '11
The demand for increase in wages by workers above the Proper Requirement of Living (KHL) standards set by the National Wage Council is likely to negatively impact labour-intensive industries in Indonesia, including textiles and garments.

In Indonesia, the National Wage Council (Dewan Pengupahan Nasional) is a tripartite agency consisting of representatives of labour unions, Government and the employers. It proposes the KHL based on a survey on 48 economic components.

The Provincial minimum wage (UMP) and the minimum wages of districts and cities are set by the respective Governors based on the recommendation of the Wage Council.

Talking to fibre2fashion about the demand of trade unions seeking an increase in UMP and its impact, Mr. Sofjan Wanandi, Chairman, Indonesian Employers Association (APINDO), said, “The minimum wage turmoil in Indonesia will hinder the recruitment of workers in the formal sector as well as have negative impact on the welfare of informal sector workers, which forms 70 percent of the total workforce.”

“Increasing wages above reasonable economies of scale will also hinder upgradation of small business entities in the informal sector. This will leave employers with no choice but to recruit outsource workers rather than to increase the number of full-time workers,” he opined.

Further, he said, “High minimum wages will force companies to undergo adjustment of working hours, reduction of fuel and electricity consumption, reduction of worker benefits, employee reductions or the increasing usage of machinery.”

Informing about some recommendations made by APINDO on the issue, he said, “We have proposed that the minimum wage should be determined once in 2 years rather than every year. Secondly, several components of KHL should be reviewed, including food, clothing, housing, health, education, transportation, recreation and savings of a worker. At the same time, multiplier effects of the increase of minimum wage should also be observed closely and carefully, in order to improve investment climate for acceleration and expansion of economic development in Indonesia.”

Mr. Ade Sudrajat, Chairman, Indonesian Textile Association (API), adds, “Since there is a huge worker population in the country in various regions, it is very difficult for us to give same wages to all of them.”

Fibre2fashion News Desk - India

Must ReadView All

Courtesy: Myntra

Apparel/Garments | On 3rd Dec 2016

Myntra to be EBITA positive by FY18: CEO Narayanan

Myntra is on track to achieve sustainable growth and be EBITA...

Courtesy: India ITME Society

Textiles | On 3rd Dec 2016

India ITME 2016 opens with over 1050 exhibitors

The India International Textile Machinery Exhibition (India ITME)...

Courtesy: Bruckner

Textiles | On 3rd Dec 2016

Indian textile companies opt for Brückner stenter lines

Indian textile firms Laxmipati Sarees, makers of polyester sarees and ...

Interviews View All

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Sunil Kumar Sharma
Loknayak JPNSSSG Ltd

'The blend of cotton–linen yarn has high demand in the domestic and...

Jurgen Gauger

‘Buying crowdsourced or creative designs are much more appealing to the...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Robert Brunner

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

December 2016

December 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Advanced Search