Minister Of Industry Agus Claims More Absorption Of New Workers Than Layoffs

The Ministry of Industry (Kemenperin) noted, based on data from the National Industrial Information System (SIINAs) in 2024, the number of new workers absorbed by the manufacturing industry began to produce throughout 2024 reaching 1,082,998 new workers.

This figure is greater than the number of layoffs reported by the Ministry of Manpower (Kemnaker) in 2024 of 48,345 people

For the record, the number of workers affected by layoffs during that period was not only workers in the manufacturing sector, but the total number for all economic sectors.

Minister of Industry (Menperin) Agus Gumiwang Kartasasmita did not deny that there were closures of several factories and layoffs. Related to this, his party conveyed empathy to industrial companies and workers who experienced this.

"The Ministry of Industry continues to strive to increase new investments in the manufacturing sector, encouraging the emergence of new industries to start producing. Thus, absorbing more new workers and becoming an alternative employment for workers affected by layoffs," Agus said as quoted from his official statement, Wednesday, March 5.

Agus assessed that the manufacturing sector has absorbed more new workers than the number of workers who have been laid off.

This is known from industry players who reported starting to produce at the Ministry of Industry.

"This shows that many manufacturing industry companies have sprung up and started producing by absorbing more new workers. In fact, more than the number of workers who have been laid off in various economic sectors," he said.

In addition, the growth of the manufacturing industry sector has also opened up wider employment opportunities. The number of workers in the non-oil and gas processing industry continues to increase, from 17.43 million in 2020 to 19.96 million in 2024.

Based on data from the National Industrial Information System (SIINAs), it shows that in 2024 the ratio of adding new workers in the manufacturing sector to the number of workers affected by layoffs will reach 1 in 20.

This means that when one workforce is laid off in the manufacturing sector, it is able to create and absorb 20 new workers. This ratio has continued to increase since 2022 by 1:5 to 1:7 and 1:20 in 2024.

The increase shows that Indonesia's manufacturing labor absorption performance is getting better.

As for the layoffs and the closure of several factories, various reasons were caused, including a decrease in export market demand due to factory mismanagement.

Then, changes to the principal business strategy that want to bring the production base closer to the overseas market, industry players are late in anticipating technological developments. As a result, the product lost to competing and other reasons.

Of these reasons, most of the factory closures were due to a decline in domestic demand because the domestic market was flooded with imported products. In addition, the factor causing layoffs was also driven by the weakening of domestic spending and the scarcity of raw materials.

"From these reasons, we cannot control it. Especially the reasons related to the weak demand for the export market. Meanwhile, what occurs in the field, more industrial/factories closures occur because of business strategies," said Agus.

Even so, the Ministry of Industry is focused on monitoring industrial closures, which are mainly due to scarcity and barriers to production raw materials and upgrading production technology to be able to find solutions.

"We need to look at various factors to understand the causes of layoffs and find solutions. As well as the synergy between relevant policy makers who have the authority to discuss joint solutions, including agencies that can issue policies related to safeguards, lartas and non-tariff barriers," he concluded.