The Influence of Business Capital and Wages in the Laundry Industry on Labor Absorption



Authors (s)


(1)  Alma Vorfi Lama   (University of Business and Technology, Kosovo)  
        Albania
(2) * Nurul Aulia Rachmawati   (Nurul Jadid University)  
        Indonesia
(*) Corresponding Author

Abstract


The growth of small and medium-sized enterprises (SMEs) plays a significant role in the economy, particularly in sectors like the laundry business, which requires substantial labor input. However, challenges such as limited capital and varying wage structures can impact the ability of these businesses to absorb labor efficiently. This study investigates the influence of wages and business capital on labor absorption in the laundry industry. The research employs a quantitative method, analyzing data from 10 laundry businesses. The results reveal that wages do not significantly affect labor absorption (t-hitung = 0.074, p = 0.941), while capital has a significant impact (t-hitung = 2.956, p = 0.0049). The findings indicate that increasing capital can improve labor absorption, while wage adjustments alone may not achieve the same effect. This study contributes to understanding the labor dynamics in the laundry sector, offering valuable insights for business owners and policymakers to optimize employment strategies.



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