API: wage increase will worsen the condition of textile and apparel industry

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Textile Industry
Illustration of TPT industry. (IO/Pramita Hendra)

Jakarta, IO – The Indonesian Textile Association (API) chairman Jemmy Kartiwa Sastraatmaja said that the increase in the provincial minimum wage (UMP) in 2023 would only worsen the already reeling textile and apparel industry (TPT). In his view, the increase in wages is also not in accordance with Government Regulation (PP) 36/2021.

“If wages increase by 10 percent, it will only make things worse,” said Jemmy, reported CNBC Indonesia, Wednesday (23/11).

He said it will trigger a wave of retrenchment in the sector, which is already under pressure from global economic slowdown.

Not only in Indonesia, Jemmy revealed that other textile producing countries such as China, Bangladesh, Vietnam, India and Pakistan also face difficulty. As a result, many exporters from these countries are targeting the Indonesian market, making it increasingly difficult to order original domestic products.

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“They are also trying to find new export markets, such as to Indonesia, whereas the purchasing power of the Indonesian people has also started to weaken,” he said. Jemmy said that Indonesian TPT producers are not only meeting demand from the export market but also domestic market, which actually account for 75 percent.

“What we have to think about is how to absorb nearly 3 million of new workers per year. This, job creation is very urgent,” said Jemmy. (un)