Labor Leader Challenges Claims on Minimum Wage and Factory Relocation

Rebutting the High Wage Narrative

Said Iqbal, President of the Indonesian Workers' Confederation (KSPI), has strongly refuted assertions that elevated minimum wages are driving factory relocations. According to Iqbal, the primary factors behind such decisions are high land rental costs, expensive utilities such as water and boiler services, and various unofficial fees levied on businesses.

Regulatory Reform as a Solution

Iqbal emphasized that to prevent further factory relocations and maintain investor confidence, the government needs to focus on regulatory reforms. Specifically, he highlighted the need for improvements in land regulations, tax policies, and excise policies. "The first thing I asked entrepreneurs was about the high rental costs, expensive water, costly boiler services, and high taxes. So, what needs fixing? Land regulations, tax regulations, and excise regulations," Iqbal stated during a press conference in Jakarta.

Addressing Business Costs

The labor leader stressed that unless these underlying cost factors are addressed, factory relocations will remain an ongoing challenge for Indonesia's industrial sector. By tackling these issues through comprehensive regulatory reform, the government can create a more favorable business environment that balances worker welfare with investor needs.