Marak PHK, Pengusaha Sulit Naikkan Upah Minimum Hingga 10% di 2025

Summary

In this discussion, Apindo (Indonesian Employers Association) addresses the challenges surrounding the proposed UMP (minimum wage) increase of 8-10% and its potential impact on businesses, particularly in light of declining demand and inflation. The association stresses the importance of legal certainty in business practices, recommending adherence to established regulations (PP51) for long-term stability. It also highlights the critical need for expanded export markets, particularly in light of Indonesia's economic goals and its trade relations with China and the EU. The focus is on maintaining business sustainability while creating jobs and fostering economic growth.

Takeaways

• 😀 Public education is needed regarding the minimum wage system, emphasizing that minimum wage applies only to new workers, while wages for those with more than a year of experience are determined through negotiations between employers and workers.
• 😀 A rise in minimum wage by 8-10% could negatively impact businesses, potentially leading to layoffs due to weakened demand and increased costs.
• 😀 It is essential to maintain legal certainty in long-term business planning, including wage regulation, to avoid constant changes in rules and predict costs effectively.
• 😀 The government should follow existing regulations (PP51) to determine the minimum wage, as these already account for regional economic conditions, inflation, and purchasing power.
• 😀 Businesses require stability in wage rules and other regulations to plan for long-term investments and create more jobs, especially in labor-intensive industries.
• 😀 Currency exchange rate stability is crucial for businesses to anticipate costs, plan prices, and predict market conditions effectively, regardless of whether the rate is 15,700 or higher.
• 😀 A stable currency exchange rate enables businesses to manage production costs and pricing strategies more predictably, helping both importers and exporters.
• 😀 APINDO supports the government's efforts to reach agreements, such as the EU trade agreement, to expand Indonesia's international market access and increase exports.
• 😀 The EU trade deal is vital to strengthening Indonesia's economy by facilitating smoother trade relations and reducing trade barriers, leading to easier access to the European market.
• 😀 To achieve the 8% growth target, Indonesia must focus on industrial development, competitiveness, and expanding exports, as domestic consumption is declining and will not suffice to drive the economy forward.

Q & A

What is Apindo's stance on the proposed wage increase of 8-10%?

Apindo acknowledges the importance of wage increases but emphasizes that they should be manageable for businesses. They point out that minimum wages typically apply to new employees, and that for employees with more experience, wages are negotiated between employers and unions. A sharp increase could lead to financial difficulties for businesses, especially as demand for goods and services has been decreasing.

Why does Apindo stress the need for long-term consistency in wage policies?

Apindo advocates for consistent wage policies because sudden changes make it difficult for businesses to plan and calculate production costs. This is especially true for industries reliant on long-term investments and stability, where fluctuating wage rules could create unpredictable financial burdens.

How does Apindo view the role of the Government Regulation No. 51 (PP51) in setting wages?

Apindo supports the use of PP51, as it provides a structured formula for determining wages based on regional economic conditions, inflation, and purchasing power. This approach allows for more predictable and regionally tailored wage decisions, which Apindo believes should be followed to ensure stability in wage setting.

What impact does the weakening rupiah have on businesses, especially those involved in imports and exports?

A weakening rupiah creates challenges for businesses, especially those relying on imports, as it raises the cost of imported goods. However, Apindo stresses that the key issue is the stability of the currency. Stable exchange rates allow businesses to predict costs and adjust pricing, while fluctuating rates complicate long-term financial planning.

How does Apindo respond to the idea that inflation and wage increases should be aligned?

Apindo acknowledges that inflation is a key factor in wage decisions, but cautions against over-relying on inflation as a sole basis for wage increases. They believe that broader economic factors, including the actual ability of businesses to pay higher wages without jeopardizing employment or economic stability, should be considered.

What is the broader impact of increasing wages on Indonesia's economy, according to Apindo?

Apindo argues that large wage increases, particularly without corresponding economic growth or increased demand, could lead to higher costs for businesses. This, in turn, could reduce their ability to hire and lead to job cuts. The concern is that excessive wage hikes could worsen unemployment and economic instability.

What role do international trade agreements, like the EU-Indonesia negotiations, play in Indonesia's economic future?

Apindo views international trade agreements, particularly with the EU, as crucial for expanding Indonesia's export markets. They argue that these agreements will help increase access to global markets, stimulate investment, and create new opportunities for Indonesian industries, especially in natural resources and technology.

How does Apindo see the importance of diversifying trade markets for Indonesia?

Apindo stresses that relying solely on domestic consumption for growth is insufficient, especially as domestic consumption has been decreasing. Expanding export markets and improving international trade relations are seen as essential for meeting Indonesia’s growth target of 8%, as they can provide a boost to the economy and create new opportunities for businesses.

What specific economic challenges does Apindo highlight that businesses in Indonesia are facing?

Apindo highlights several challenges, including reduced consumer demand, increasing production costs, and a weakening currency. These factors create a difficult environment for businesses, which must navigate fluctuating costs while maintaining profitability and job security.

How does Apindo suggest addressing Indonesia's economic slowdown and rising unemployment?

Apindo advocates for a focus on creating more jobs through investment and industrial growth. They argue that by fostering industries, improving the business climate, and increasing exports, Indonesia can overcome the current economic challenges, reduce unemployment, and create long-term economic stability.