The Indonesian Employers' Association (Apindo) revealed that most of the companies leaving Karawang Regency were labor-intensive industries engaged in textiles, clothing, leather (TSK), footwear factories, and electronics. According to the Deputy General Chair for Agrarian, Spatial and Regional Planning of Kadin as well as the Chair of Apindo for Property and Economic Zones, Sanny Iskandar, companies that left Karawang were mostly due to the impact of the crisis due to the COVID-19 pandemic and high labor wages. “Companies that leave Karawang are mostly affected by the economy and high labor wages that are not in line with productivity. So, many entrepreneurs have to make tough decisions to continue operating as before before the pandemic," said Sanny Iskandar, Monday (20/6).
According to him, the company is now moving to areas that have a more competitive Regency Minimum Wage (UMK), such as the West Java area which includes Garut, Subang, and others. He explained that many also relocated their factories to locations that had lower regional wages, such as Central Java and East Java.
Sanny said that the current status of Karawang is included as the region with the highest wages. “The Karawang UMK increased by 4.4 percent from Rp4,594,000 to Rp4,798,312, the highest among other regions in Indonesia. The increase in wages in Karawang is also quite significant, in one year the increase in wages has reached 58 percent," he added
Previously, the Chairperson of Apindo, Hariyadi Sukamdani, also said the same thing that these companies had moved to areas with lower Provincial Minimum Wages (UMP).
One that Hariyadi mentioned was Central Java Province. In addition to having lower labor wages than Karawang, the industrial development there is also considered to have advanced.
"Central Java's industrial development is quite advanced, so they relocated there," Hariyadi explained, Sunday (19/6).