We hope that President Jokowi will save the garment industry in West Java, whose minimum wage for the district/city (UMK) has been set so high.
The West Java Textile Producers Association (PPPTJB) has urged Indonesian President Joko Widodo (Jokowi) to save the province’s garment industry by helping to resolve the crucial minimum wage issue.
“We hope that President Jokowi will save the garment industry in West Java, whose minimum wage for the district/city (UMK) has been set at such a high level,” said PPPTJB Chairman, Yan Mei, in a statement released Saturday.
The garment industry, which was already in critical condition due to the minimum wage policy under regional autonomy in the past, will quickly die as the global economic downturn continues to affect demand. in the garment market, she added.
She further endorsed the President’s warning of a global recession in 2023 due to the economic, food and energy crises triggered by the COVID-19 pandemic and the Russian-Ukrainian war.
The President recently called on Indonesians to remain cautious about the predictions of a global recession, which he heard during his talks with several important figures such as the UN Secretary General, the International Monetary Fund (IMF) and G7 leaders.
According to Yan Mei, orders at garment factories in West Java in the post-COVID-19 era and amid the Russian-Ukrainian war have dropped by 40-70% on average.
This difficult situation also triggered a threefold increase in logistics costs and made shipments of clothing products unreliable. As a result, factories are faced with a build-up of inventory.
This situation was recognized by Desi Sulastri, a member of the Bogor region compensation committee.
She said the situation forced many garment factories in West Java to be closed and led to the termination of labor contracts of 54,553 workers in 106 factories and the layoff of 9,592 workers in 18 closed factories.
She arrived at the figure of 64,165 layoffs based on data released by 14 district/city administrations.
Besides the president’s warning of a global economic downturn, orders for garment factories remain uncertain, Sulastri said, adding that despite falling global demand for apparel products and fierce competition with countries like Bangladesh and the Vietnam, the minimum wages that garment companies have to pay have tended to continue to rise.
“No one knows for sure what will happen in the future, although everyone expects orders to ‘return to normal’ in June 2023,” she said.
Yan Mei noted that the ongoing war in Ukraine has significantly increased inflation rates in the United States, United Kingdom, Germany and many other European Union countries.
The inflation rate in the United States, for example, reached 9.1% in June 2022. This was “a new 40-year high amid soaring gasoline prices”, said she said, citing data from the washington post.
Amid the rising inflation rate, the stock prices of the top five U.S.-listed apparel companies, including VS&Co, GAP, PVH and Nike, have fallen significantly, according to the washington post The data.
Additionally, customers in the US and Germany, struggling with cost of living pressures, currently tend to prioritize food and energy spending over clothing.
To deal with this situation, H. Sariat Arifia, Spokesperson of PPPTJB, appealed to President Widodo to help rescue the labor-intensive industry, especially in the garment sector. .
In the case of the garment industry in West Java, it is obviously a labor-intensive sector that can help solve the province’s unemployment rate and maintain the social stability in the community, Arifia said.
Since the current situation is the worst ever in the garment industry, Indonesia must rescue the garment industry, he said, adding that special regulation for the garment industry was necessary.
Publication of the regulations cannot be further delayed, he added. “The longer the government delays, the more workers will end up unemployed and the more factories will close,” he said.
Data on the actual state of garment factories is available, and stakeholders, including the media, are always welcome to see the number of garment factories that have laid off workers, he added.
PPPTJB President Yan Mei said that she has repeatedly shared her views on UMK-related issues withh local authorities and the Ministry of Manpower and have offered solutions in the past.
However, a solution to the last problem is not yet available, so the PPPTJB hopes that President Widodo will help find a win-win solution to avoid further layoffs due to the coming economic recession, she said. added.