JAKARTA (Yosefardi) – The high minimum wage prompt 135 shoe factories operating in the industrial area of Tangerang (Banten) and Bekasi (West Java) to relocate their operations to East and Central Java province, Bisnis Indonesia reported this morning.
Eddy Widjanarco, chairman of Indonesian shoe association (Aprisindo), said that 135 shoe factories will relocate their operations this year as the regional minimum wage in Jakarta, Bogor, Depok, Tangerang, and Bekasi (Jabodetabek) is increasing.
He said new locations targeted to be new base of operations in Central Java such as Demak and Kendal while in East Java such as Mojokerto, Jombang, and Pasuruan.
As of November 1st, 2013, 12 provincial administration have set the 2014 minimum wage. The agreed hike is in the range of 10% to 45%. Four out of 12 provicnes set higher increase than president Susilo Bambang Yudhoyono’s cap of 20%.
Jakarta governor Joko ‘Jokowi’ Widodo has signed the 2014 minimum wage at Rp2.44 million per month, representing a modest 10.97% increase from last year. Workers union actually demanded 50% hike to about Rp3.7 million per month.
Industrial city of Bekasi in West Java province has set a significantly higher increase (39.5%) in minimum wage for 2014.