Increase in Altitude UMP Makes Indonesian Imports More Swollen
PojokNasional. The Indonesian Workers Union (KSPI) requested an increase in the provincial minimum wage (UMP) of 201-25%, greater than the government's stipulation of 8.03%.
Deputy Chairperson of the National Wages Board of the Indonesian Entrepreneurs Association (Apindo) Bob Azzam explained, if the request for a 25% wage increase was granted, it could trigger an increase in imports.
He explained, wage increases would increase public consumption. Even though there is no increase in consumption, currently domestic production cannot meet its own consumption needs.
If the high consumption without being offset by the increase in production, there will be massive inflation, aka hyperinflation.
"Demand will be higher than we produce goods. Now this will cause inflation to also reduce the labor purchasing power later. So we will experience hyperinflation, which in turn will hit workers," he explained
Zzam said, the potential for inflation would certainly be anticipated by the government. It's just that domestic production that is still minimal cannot be relied on to reduce inflation. So the most likely way to go in the short term is imports.
"If we consume it a little more now, for example, our chili must be imported, our onions must be imported, salt must be imported. It means what, our productivity cannot meet our needs," he said.
So according to him, the pretext used to propose a wage increase to increase consumption and improve the national economy will not be achieved.
In fact, it will harm the workers themselves in the end, because the price of goods increases beyond the increase in the wages they receive.
"Not only workers but all non-workers will also be hit. So do not think that the increase in labor costs to increase consumption will increase the national economy is wrong," he said
Deputy Chairperson of the National Wages Board of the Indonesian Entrepreneurs Association (Apindo) Bob Azzam explained, if the request for a 25% wage increase was granted, it could trigger an increase in imports.
He explained, wage increases would increase public consumption. Even though there is no increase in consumption, currently domestic production cannot meet its own consumption needs.
If the high consumption without being offset by the increase in production, there will be massive inflation, aka hyperinflation.
"Demand will be higher than we produce goods. Now this will cause inflation to also reduce the labor purchasing power later. So we will experience hyperinflation, which in turn will hit workers," he explained
Zzam said, the potential for inflation would certainly be anticipated by the government. It's just that domestic production that is still minimal cannot be relied on to reduce inflation. So the most likely way to go in the short term is imports.
"If we consume it a little more now, for example, our chili must be imported, our onions must be imported, salt must be imported. It means what, our productivity cannot meet our needs," he said.
So according to him, the pretext used to propose a wage increase to increase consumption and improve the national economy will not be achieved.
In fact, it will harm the workers themselves in the end, because the price of goods increases beyond the increase in the wages they receive.
"Not only workers but all non-workers will also be hit. So do not think that the increase in labor costs to increase consumption will increase the national economy is wrong," he said
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