Page 52 - e-KLIPING KETENAGAKERJAAN 31 DESEMBER 2019

Title WORKERS WRESTLE WITH LABOR LAW, SKILLS GAP, AUTOMATION
Media Name thejakartapost.com
Pub. Date 30 Desember 2019
https://www.thejakartapost.com/news/2019/12/30/workers-wrestle-with-la bor-law-
Page/URL
skills-gap-automation.html
Media Type Pers Online
Sentiment Positive

As President Joko "Jokowi" Widodo focuses his administration's agenda on human
resources and talent development, issues that are presenting themselves as major
challenges are the 2003 Labor Law revision, shortage of skilled workers and the rise
of automated jobs.

The business community considers the 2003 Labor Law and its derivatives to be one
of the factors dragging down the country's competitiveness, as high severance pay
requirements and high wage requirements have discouraged labor-intensive, smaller
enterprises from investing in the country.

One example is the South Korean Garment Entrepreneurs Association in Indonesia
chairman, Ahn Chang Sub, among businesspeople who have lamented the drastic
minimum wage increases over the years in West Java.

Last year, an estimated 21 companies planned to relocate their factories from
Karawang, West Java, to other regions on account of the 2019 minimum wage
increase.

But he may not be the only one. Around 160 South Korean-owned textile companies
employing around 250,000 people are currently "confused" as to what to do in the
face of a provincial minimum wage increase in 2020, Ahn claimed.

"Wages have increased by 3.5 times in seven years but productivity hasn't followed
suit [...] South Korean textile entrepreneurs will be unable to survive in West Java
[if this continues]," Ahn said last month.

Meanwhile, Indonesia's severance pay requirement, equal 32 to 36 months of an
employee's salary, is still among the highest in the region, prominent businessman
Sofjan Wanandi said in August.

As such concerns loom large, a document showing key points of the proposed
revision to the 2003 law on manpower went viral on messenger and social media
platforms around last August. The points include a reduction in severance pay, an

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