Up to 1 million workers may face layoff, says minister<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The economic hardship faced by businesses, in particular due to
\nthe recent fuel prices hike, may result in up to 1 million
\nworkers losing their jobs by the end of the year, a minister
\nsays.<\/p>\n
\"Others estimated that there could be up to two million
\nworkers forced out of work, but our study showed that the number
\nwould be only as much as one million,\" said Minister of Manpower
\nand Transmigration Fahmi Idris on Thursday.<\/p>\n
The government, under pressure to avoid fiscal disaster amid
\nan inflated fuel subsidy, increased on Oct. 1 domestic fuel
\nprices by an average of 126 percent.<\/p>\n
Operating costs of several industrial sectors have gone up by
\n10 percent to 50 percent since, prompting companies to consider
\nreducing their workforce to stay in business.<\/p>\n
Fahmi added that the sectors most affected were the furniture
\nand timber industry, as well as textiles and garments.<\/p>\n
Aside from the fuel prices hike, the furniture and timber
\nindustry are currently also having difficulties in obtaining raw
\nmaterials due to the lower logging quota and illegal logging.<\/p>\n
\"Meanwhile, textiles are facing tight competition due to
\nChina's massive expansion,\" he said.<\/p>\n
However, Indonesian Business Association (APINDO) chairman
\nSofyan Wanandi promised that companies under the association
\nwould not terminate any of their workers in the next six months.<\/p>\n
\"We will try not to lay off workers in the next six months.
\nBut, we cannot guarantee this for SMEs (small and medium
\nenterprises),\" Sofyan said after signing a memorandum of
\nunderstanding between APINDO and state workers insurance company
\nJamsostek on Thursday.<\/p>\n
Bigger companies, he explained, had more capital and therefore
\nwere more resilient during times like this. Sofyan estimated that
\nthere could be hundreds of thousands of workers in SMEs facing
\npossible layoffs.<\/p>\n
As of February 2005, there were 105.8 million workers
\nnationwide, of which around 79 million were working with the
\ncountry's 42.3 million SMEs.<\/p>\n
Meanwhile, Jamsostek director Iwan Pontjowinoto added that his
\ncompany had set aside Rp 1 trillion for possible disbursement of
\nworker's pension funds.<\/p>\n
Workers registered under Jamsostek pension fund program
\nusually cash in their benefits after being retrenched.<\/p>\n
There are currently 115,000 companies that have registered 7.5
\nmillion active workers in Jamsostek's workers insurance scheme.<\/p>\n
Meanwhile, responding to demands of adjustments in the minimum
\nregional wage (UMR), Fahmi explained that it would depend on the
\ncost of living in each area as well as the level of economic
\ndevelopment of the provinces and the productivity of companies.<\/p>\n
\"We have set the UMR based on the cost of a decent standard of
\nliving and not the minimum cost. It will be effective in
\nJanuary,\" he said.<\/p>\n
This standard includes education and housing costs aside from
\nthe minimum cost of living. The amount varies between provinces.<\/p>\n
Jakarta's minimum wage currently stands at Rp 711,283. Labor
\nunions have demanded that it be raised to Rp 1.2 million
\nfollowing the rising costs of basic commodities.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/up-to-1-million-workers-may-face-layoff-says-minister-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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