Jakarta, hitclubapk3 Indonesia
—
Deputy Chairman of Kadin for Industry, Saleh Husin, assessed that the implementation of Government Regulation (PP) Number 49 of 2025 concerning Wages has the potential to affect the growth rate of the non-oil and gas processing industry sector.
“Government Regulation Number 49 of 2025 has the potential to influence the growth of the non-oil and gas processing industry sector, especially through production costs, investment climate and labor absorption dynamics. As the main contributor to industrial GDP and manufacturing exports, this sector is very sensitive to changes in wage policy,” said Saleh in an official statement, Thursday (18/12).
Saleh said that expanding the adjustment index range and introducing sectoral minimum wages tended to increase labor costs, so that industry players would be more careful in expanding capacity and recruiting new workers.
ADVERTISEMENT
SCROLL TO CONTINUE WITH CONTENT
The former Minister of Industry said that the adjustment steps taken by business actors could be in the form of efficiency, limited automation, and workforce rationalization.
“The adjustment strategies adopted by business actors generally focus on efficiency, limited automation, or labor rationalization, which can limit the contribution of this sector to national economic growth,” said Saleh.
From the investment side, Saleh said, uncertainty due to relatively frequent changes in wage policies has the potential to hold back the realization of new investments in the non-oil and gas processing industry.
Investors tend to postpone or shift investment to sectors or regions with more stable cost structures, so that the rate of fixed capital formation (PMTB) in the manufacturing sector can slow down.
“This condition could ultimately reduce the medium-term growth potential of the non-oil and gas industry, especially if it is not balanced with increased productivity and technological efficiency,” said Saleh.
On the other hand, this policy has the potential to encourage growth on the demand side by increasing the purchasing power of industrial workers.However, the positive effect on domestic demand tends to be gradual and indirect, while the impact of increasing production costs is more rapid and directly felt by industry players.
As a result, in the short term, the net effect on the growth of the non-oil and gas processing industry sector has the potential to be moderate to tend to restrain the growth rate, especially in export-oriented subsectors that face intense global competition.
“Overall, PP 49 of 2025 has the potential to create a trade-off between protecting workers’ income and accelerating the growth of the non-oil and gas processing industry. Without strong supporting policies, such as increasing labor productivity, industrial investment incentives, and strengthening the domestic supply chain, the future growth of the non-oil and gas industrial sector risks moving slower than its potential,” said Saleh.
(har)
Read More: Title not found
Read More: DPR: Debt Collectors Contrary to the Law, Cannot Take Vehicles by Force
