Analysis of the Leading Sector and the Effect to Regional Minimum Wage (UMSK): A Case Study in Cimahi City, Indonesia

The purpose of this study was to analyze the leading sectors in the city of Cimahi and its influence on the regional minimum wage (UMSK) of the city of Cimahi. This research uses descriptive quantitative research. The data used is the Large and Medium Industry Statistical Data for 2011 to 2015. The leading sectors in Cimahi City in 2019 based on the 5 digit KBLI criteria, Large Business Scale, Added Value and Labor Productivity growth in the 2015 Large Industry data are 13131 Yarn Refinement Industry, 17019 Other Paper Industry, 13911 Knitted Fabric Industry, 20116 Basic Organic Chemistry Industry, Dyestuffs and Pigments, Dyes and Pigments, 25940 industrial Buckets, Cans, Drums, and Similar Containers of Metal, and 26310 Telephone and Facsimile Equipment Industry.

INTRODUCTION Cimahi City showed a higher economic growth rate of over 5% from 2011 to 2017 but experienced a slowdown since 2013. Figure 1 shows the Indonesian economy's development, which grew rapidly in 2012, then fell sharply in 2013. Cimahi's economic development continues to offer better performance than the national economic growth. One of the indicators to show the welfare rate of a region is the gross regional domestic product (GRDP) databased on prices that are valid or based on constant prices. Moreover, the welfare of a community is also indicated by the income per capita of a region, which even an indicator of economic growth (Sutanti & Dwi, 2019). Cimahi City's economy is dominantly controlled by three economic sectors:the Manufacturing Industry, the Construction Sector, and the Wholesale and Retail Trade, Car and Motorcycle Repair sectors. These three sectors controlled the economy by more than 75% in 2017. The manufacturing industry contributed 45.15% to Cimahi City's GRDP in 2017, and the other two sectors respectively contributed 13.08% and 17.54% in 2017. Manufacturing has traditionally played a vital role in the economic development of developing countries. In recent years, it has been argued that the importance of manufacturing has diminished over the last 20-25 years, resulting in premature deindustrialization or non-industrialization in developing countries (Haraguchia et al., 2017). The Manufacturing Industry sector plays a significant role in driving the economy, seen from the enormous contribution to Cimahi City's economy. The other sectors are all under 20% in the economy and relatively small compared to the manufacturing sector. 50  The development of the Manufacturing Industry sector itself has played a declining role in the Cimahi City economy. This is indicated by the decline in the manufacturing sector's contribution to the PDRB of Cimahi City, which has continued from 2011 to 2017. The decrease in this sector will undoubtedly increase with the increase in other sectors. The sector with an apparentrise in Cimahi City's GRDP is the Information and Communication sector. Information and communication technologies (ICTs) are critical enablers of innovation throughout the economy. Inmost OECD economies, information industries account for the largest share of business expenditures on research and development, amounting to about 25% of total business expenditures on research and development and 0.2% to 0.4% of GDP (Hong, 2017). Figure 2 above shows the economic structure in 2017, which is the latest information from existing data to lead the development of the economic system in Cimahi City. 4 sectors have a contribution of more than 5% so that four economic sectors play a significant role in the economy in Cimahi City. Labor issues in Indonesia must receive serious attention from various parties, both government and private. Labor issues are the main problems that must be faced by the state and the people of Indonesia. So, it is suggested that the government should embrace the private sector to reduce and resolve labor problems jointly. Limited employment triggers some of the main issues of employment in Indonesia low quality of labor, high unemployment, wage factors, and social security factors that are considered inadequate (Olilingo & Putra, 2020). Table 1 illustrates that the role of the processing industry provides the most extensive employment opportunities in Cimahi City. An increase in the workforce increases between 2016-2017 in the Manufacturing Industry sector, where there was a decrease in the Manufacturing Industry sector's contribution in the same year. Besides, this Government Regulation states that the Governor can determine the provincial or district/city sectoral minimum Wages based on an agreement between the employers' association and the workers/labor union in the sector concerned. The sectors that can be proposed to get a wage increase above the UMK are the leading sectors in each regency/regency city. Cimahi City, as an industrialbased economic area, requires a study in determining the top sectors in the Cimahi City area. The study of the sector's leading economic potential is essential for future development planning, especially in implementing regional autonomy, which will be impacted by its potential and resources (Sutanti & Dwi, 2019). This stipulation provides an overview of the ability of the leading sectors to support the superior economy of Cimahi City and, at the same time, can be used as a reference in submitting the Cimahi City Sectoral Minimum Wage. The research objective is to determine the leading sectors of Cimahi City based on four categories of the Minister of Manpower Regulation No. 15 of 2018 concerning Minimum Wages.

B. LITERATURE REVIEW 1. Industry
The processing Industry is an economic activity that changes an essential item mechanically, chemically, or by hand. It becomes finished/semi-finished goods, and/or goods with less value become higher-value goods and are closer to the enduser. Included in this activity is industrial services/makloon and assembling work (BPS.go.id).
Industrial services are industrial activities that serve the needs of other parties. In this activity, raw materials are provided by other parties. Simultaneously, the processor only carries out processing in exchange for a certain amount of money or goods as compensation (makloon wages), for example a rice milling company that mills rice / unhulled farmers with certain remuneration (BPS.go .id).A company or industrial business is a business unit (unit) that carries out economic activities, aims to produce goods or services, is located in a certain building or location, and has separate administrative records regarding production and cost structure. There is one or more people who are responsible for the business (BPS.go.id).
Industry classification refers to two sources: the Indonesian Central Bureau of a. For micro-businesses, the criteria are as follows: 1) Has a net worth of at most Rp. 50,000,000.00 (fifty million rupiahs) excluding land and buildings for business; or 2) Have annual sales of at most Rp. 300,000,000.00 (three hundred million rupiahs). b. Furthermore, the criteria for small businesses are: 1) Has a net worth of more than Rp. 50,000,000.00 (fifty million rupiahs) up to a maximum of Rp. 500,000,000.00 (five hundred million rupiahs) excluding land and buildings for business premises; or 2) Has annual sales of more than Rp. 300,000,000.00 (three hundred million rupiahs) up to a maximum of Rp. 2,500,000,000.00 (two billion five hundred million rupiahs). c. Meanwhile, the criteria for medium enterprises are 1) Has a net worth of more than Rp. 500,000,000.00 (five hundred million rupiahs) up to a maximum of Rp. 10,000,000,000.00 (ten billion rupiahs) excluding land and buildings for business; or 2) Has annual sales of more than Rp. 2,500,000,000.00 (two billion five hundred million rupiahs) up to a maximum of Rp. 50,000,000,000.00 (fifty billion rupiah). d. Based on these criteria, a large-scale business is a level of wealth and sales that is higher than the requirements for medium-sized businesses, namely: 1) Has a net worth of more than Rp. 10,000,000,000.00 (ten billion rupiah) excluding land and buildings for business; or 2) Has annual sales of more than Rp. 50,000,000,000.00 (fifty billion rupiah).

Leading Sector Variables
Leading/base economic sectors in a region are sectors that have higher production capability compared to the ability of the same sector in other regions, thus the leading/base economic sector products and services aside from being able to meet their own needs, the rest can be sold outside the region so that the region receives income (Sayuti & Safitri, 2020) The determination of the leading sectors of Cimahi City refers to the Minister of Manpower Regulation No. 15 of 2018 concerning Minimum Wages. The third part of this Ministerial Regulation regarding District/City Sectoral Minimum Wages, Article 15 paragraph two emphasizes that the leading sector studies must examine the following variables: a. Business category according to KBLI 5 (five) digits KBLI is a reference classification used to classify Indonesian economic activities/activities into several business fields/business fields, differentiated based on the type of economic activity that produces products/outputs in goods and services. KBLI consists of a classification structure of economic activities that is consistent and interconnected, based on internationally agreed concepts, definitions, principles, and classification procedures. The KBLI provides a comprehensive framework in which economic data can be collected and presented in a format designed to design, process, disseminate, analyze, and plan and evaluate policies. The basis for the preparation of KBLI is the International Standard Industrial Classification of All Economic Activities (ISIC), up to 4 digits, adjusted to the ASEAN Common Industrial Classification (ACIC) and East Asia Manufacturing Statistics (EAMS), and developed in detail up to 5 digits for economic activities that are unique to Indonesia (BPS, 2020).
KBLI is used to provide a continuous flow of information, which is necessary to monitor and evaluate activities over a certain period, for example, in the preparation of GDP/GRDP. Provide a classification system for economic activities/business fields that can be used to measure economic units' behavior. Displays statistical data in a complete and structured manner. Make comparisons between data at the national level with other countries. It is communicating domestic and foreign officials. As a basis for determining the qualifications for a Trade Business License (SIUP). As a basis for determining the qualifications for Company Registration Certificate (TDP). As a basis for determining the qualifications for investment/investment licensing. As a basis for determining the procurement of goods and services. As the basis for the business sector system to obtain a Business Identification Number, and as the basis for the business sector for Taxpayer registration.
b. Companies with Large Business Scale The variables of the Large and Medium Industries Statistics are ISIC5 (5 digit KBLI), Input, Output and Labor. The leading sector is a sector that is very important in the economic development of a region. A leading sector is a sector capable of encouraging growth or development for other sectors, both the sector that supplies its input and the sector that uses its output as an input in the production process.
According to Sayuti & Safitri (2020) there are four conditions for certain sectors to become superior sectors, namely: 1) The sector must produce products that have a large enough demand so that the rate of economic growth develops rapidly as a result of the demand effect. 2) Because there are changes in technology that are creatively adopted, the new production function will shift with a wider capacity development. 3) There must be an increase in reinvestment of the products of the priority sectors, both private and public. 4) The sector must develop so that it is able to have an influence on other sectors. c. Value added growth Value added is the amount of output minus the value of the input (intermediate cost). Calculation method: NTB = Output-Input d. Labor Productivity The economic growth of a region can be determined by some factors of production which belong to the region; those are man-made factor of productions, natural resources, human resources, and the level of technology used. Human resource is an important factor of productionin determining the level of economic growth because it closely relates to the skills andtechnological advances that determines the level of productivity in a given sector or region, alsoaffects the inequality of income (Kadir, 2018).

Companies with Large Business Scale
This stage determines which companies are included in the large industrial business scale. Based on data from Large and Medium Industries, data is released only based on large industry categories. This category refers tothe Number of workers 100 people or more (Based on Labor) and Has an output value of 50 billion rupiahs or more (Based on Output Value / Turnover). Table 4 has filtered companies that enter large scale businesses that have criteria of Labor or Output Value. This means that one of the criteria included in the calculation will make the company a large-scale company. The number of companies for each year has decreased after being reduced by medium-sized enterprises.  Source: Large and Medium Industry Statistics As an alternative, large scale business calculations only include an output value of at least 50 billion. The number of companies using this method is less than combining the two methods / two sources. The number of companies from 2011 to 2015 was 42, 46, 41, 61, and 70. This method is more straightforward because it refers to Law No. 20 of 2008 and can consider the number of workers less than 100 but has a large output value.

Value-Added Growth
Added value is the amount of output minus the value of the input (intermediate cost). The calculation refers to the sector not the company, so the added value calculated is the added value of the sector in the 5 digit KBLI for largescale industries. Similar to the calculation for large scale businesses, the calculation of added value will refer to two alternative methods, namely the first method of output and labor. The second method is only based on output. Table 4. and Table 4.5 provides the calculation of added value per sector for the two approaches above. Table 4.4. shows positive value-added growth in 2015 colored green. 2015 is a prerequisite for entry into the leading sector, because it is the last available data and shows the last measurable performance  Table 4.5. focus on large scale business based on output. The positive growth of value added in 2015 was less than in terms of output and labor. In this section, we can determine which KBLIs have superior criteria based on positive value added growth.

Labor Productivity
This section is the last variable to determine the leading sector, namely Labor productivity. Productivity calculation is calculated by dividing the output value by the number of workers in each KBLI and each year. The unit used is million rupiah, to describe how much output value each worker can produce in each KBLI and each year during the year.    18  25934  19  25940  25940  25940  25940  20  25992  25992  21  26310  26310  26310  22 31004 31004 Table 4.8 shows that there are 10 sectors that fall into the superior category. 2013 and 2014 have more superior categories, or there are 13 sectors that fall into the superior category. If we enter the criteria that must be entered at least 3 years in the existing data series and must appear in 2015, then the leading sectors in Cimahi City can be presented in Table 4.9. The calculation of the leading sectors for large enterprises using the output method only can be mapped in Table 4.10. The number of KBLIs that fall under the criteria for superior sectors is reduced in this way. This is because some companies are included in the labor scale but not on the output scale. 2014 was the year with the most emerging KBLI / sectors or as many as 8 sectors. The smallest number of leading sectors was in 2012.