Despite the expected economic growth of between 6.3 to 6.5 percent in the next two years, similar to the level this year, employment conditions and workers’ livelihoods will not change sufficiently unless measures are taken to review the pro-market labor policy and repair the low quality of human resources.
The significant increase in government investments in infrastructure development next year and bigger allocations from the Rp 1.4 trillion national budget to regional administrations will help attract more foreign direct investments to various sectors of the economy, notably plantations and mining, thereby generating more jobs and raising workers’ income.
However, impressive economic growth will not greatly change poor labor conditions, despite the decrease in the unemployment rate and the development of a social safety net, mainly because the workforce is still dominated by the uneducated. A survey conducted by the Central Statistics Agency (BPS) in August 2011, shows 49.4 percent, or 54.2 million, of the workforce were elementary school graduates and dropouts and only 5.1 percent, or 5.6 million, were university and academy graduates.
More than 40 percent are high school graduates who mostly have been employed through outsourcing practices or on a contract basis in labor-intensive industries at the minimum wage level. This segment of workers and their families will not be able to have decent jobs and receive decent wages because of their low productivity and low skill levels, two main reasons given by employers who remain reluctant to raise their workers’ wages and uphold social justice in society.
The stagnation in labor development has a lot to do with most investors’ lack of awareness for the need to improve their workers’ skills, and the dropping of training programs and declining condition of labor training centers under regional autonomy. Data at the Manpower and Transmigration Ministry shows 147 of 150 vocational training centers in regencies and municipalities have collapsed since 1999 and most instructors have moved to other sections in regional administrations. The government and the private sector cannot entrust the education program, despite the significant rise in the education budget in the past three years, to resolve the human resources problem in the short term.
The government has to speed up the ongoing review of the 2003 Labor Law and the 2004 Overseas Labor Placement and Protection Law as a strategic step to repair labor conditions and help boost economic growth.
The 2003 Labor Law review has to require employers to regularly provide training programs for their workers at all levels, mandate regional governments to allocate a part of their budget to revive the labor training centers and provide training programs for high school dropouts to improve workers’ productivity and competitiveness in the flexible labor market. It also has to tighten outsourcing practices and upgrade the minimum wage system to create job security, improve workers’ purchasing power and improve consumption demand.
It has looked irrational and unjust that big companies of the caliber of PT Freeport McMoran Indonesia or investors enjoying facilities in the Batam Special Economic Zone are still paying their workers at the minimum wage level.
The ongoing review of the 2004 Overseas Labor Placement and Protection Law is also expected to minimize the export of unskilled domestic workers and instead facilitate the sending of skilled ones to help improve social and legal protection for migrant workers and encourage their employment in the formal sector abroad.
The gradually improved labor conditions at home and the sending of competent migrant workers abroad will not only improve workers’ bargaining power but also strengthen the national economy’s fundamentals, including the country’s exchange reserves which are needed to accelerate economic development programs and to counter negative impacts of the economic turmoil rocking Europe at present.
Besides, the government has to intensify the microfinance program by giving wider access to university graduates to establish small and medium enterprises (SMEs) to generate more jobs, help cope with the unemployment problem and improve net domestic products.
Like other developing Asian countries such as China, India and Vietnam, Indonesia can no longer depend on foreign investments and big companies to cope with economic growth and the unemployment problem.
The campaigning of microfinance and entrepreneurship in universities and the opening of a wider market for Indonesian products overseas will help encourage university and academy graduates to build more job-rich SMEs to press the unemployment rate far below the current 6.56 percent. So far the government has disbursed hundreds of trillions of rupiah in soft loans to more than 51 million SME units but their strategic role should be optimized to generate millions of job opportunities.
A gradual improvement of the quality of human resources, creation of job security among workers and reform of the remuneration system (toward decent work and wages) will certainly enable workers and their employers to pay their contribution to the national social security programs that will start in the next few years.
The national healthcare program, an expansion of the so-called Jamkesmas healthcare scheme for the poor, will start in January 2014 while the occupational accident, old-age risk, pension and death benefit programs, an expansion of the current social security programs for workers, is to begin in July 2015. The national social security system has been designed to provide social protection for all people and help eradicate poverty, which still affects at least 63 million people in the country.
The significant increase in government investments in infrastructure development next year and bigger allocations from the Rp 1.4 trillion national budget to regional administrations will help attract more foreign direct investments to various sectors of the economy, notably plantations and mining, thereby generating more jobs and raising workers’ income.
However, impressive economic growth will not greatly change poor labor conditions, despite the decrease in the unemployment rate and the development of a social safety net, mainly because the workforce is still dominated by the uneducated. A survey conducted by the Central Statistics Agency (BPS) in August 2011, shows 49.4 percent, or 54.2 million, of the workforce were elementary school graduates and dropouts and only 5.1 percent, or 5.6 million, were university and academy graduates.
More than 40 percent are high school graduates who mostly have been employed through outsourcing practices or on a contract basis in labor-intensive industries at the minimum wage level. This segment of workers and their families will not be able to have decent jobs and receive decent wages because of their low productivity and low skill levels, two main reasons given by employers who remain reluctant to raise their workers’ wages and uphold social justice in society.
The stagnation in labor development has a lot to do with most investors’ lack of awareness for the need to improve their workers’ skills, and the dropping of training programs and declining condition of labor training centers under regional autonomy. Data at the Manpower and Transmigration Ministry shows 147 of 150 vocational training centers in regencies and municipalities have collapsed since 1999 and most instructors have moved to other sections in regional administrations. The government and the private sector cannot entrust the education program, despite the significant rise in the education budget in the past three years, to resolve the human resources problem in the short term.
The government has to speed up the ongoing review of the 2003 Labor Law and the 2004 Overseas Labor Placement and Protection Law as a strategic step to repair labor conditions and help boost economic growth.
The 2003 Labor Law review has to require employers to regularly provide training programs for their workers at all levels, mandate regional governments to allocate a part of their budget to revive the labor training centers and provide training programs for high school dropouts to improve workers’ productivity and competitiveness in the flexible labor market. It also has to tighten outsourcing practices and upgrade the minimum wage system to create job security, improve workers’ purchasing power and improve consumption demand.
It has looked irrational and unjust that big companies of the caliber of PT Freeport McMoran Indonesia or investors enjoying facilities in the Batam Special Economic Zone are still paying their workers at the minimum wage level.
The ongoing review of the 2004 Overseas Labor Placement and Protection Law is also expected to minimize the export of unskilled domestic workers and instead facilitate the sending of skilled ones to help improve social and legal protection for migrant workers and encourage their employment in the formal sector abroad.
The gradually improved labor conditions at home and the sending of competent migrant workers abroad will not only improve workers’ bargaining power but also strengthen the national economy’s fundamentals, including the country’s exchange reserves which are needed to accelerate economic development programs and to counter negative impacts of the economic turmoil rocking Europe at present.
Besides, the government has to intensify the microfinance program by giving wider access to university graduates to establish small and medium enterprises (SMEs) to generate more jobs, help cope with the unemployment problem and improve net domestic products.
Like other developing Asian countries such as China, India and Vietnam, Indonesia can no longer depend on foreign investments and big companies to cope with economic growth and the unemployment problem.
The campaigning of microfinance and entrepreneurship in universities and the opening of a wider market for Indonesian products overseas will help encourage university and academy graduates to build more job-rich SMEs to press the unemployment rate far below the current 6.56 percent. So far the government has disbursed hundreds of trillions of rupiah in soft loans to more than 51 million SME units but their strategic role should be optimized to generate millions of job opportunities.
A gradual improvement of the quality of human resources, creation of job security among workers and reform of the remuneration system (toward decent work and wages) will certainly enable workers and their employers to pay their contribution to the national social security programs that will start in the next few years.
The national healthcare program, an expansion of the so-called Jamkesmas healthcare scheme for the poor, will start in January 2014 while the occupational accident, old-age risk, pension and death benefit programs, an expansion of the current social security programs for workers, is to begin in July 2015. The national social security system has been designed to provide social protection for all people and help eradicate poverty, which still affects at least 63 million people in the country.
1 komentar:
On my personal opinion, I am agree with the first statement that “employment conditions and workers’ livelihoods will not change sufficiently unless measures are taken to review the pro-market labor policy and repair the low quality of human resources”. There is too many factors affects in this time. First, workforce is still dominated by the uneducated. I think it is the big problem in the labor conditions. Because they have low productivity and low skill levels. In my opinion, the government needs to do something to solve this problem.
According to the statement that says “The government and the private sector cannot entrust the education program, despite the significant rise in the education budget in the past three years.” I think our education is not good enough for labor skills. We need to do something new besides the formal education to get more skills. For example: leadership camp, creativity class, and etc. And they must make a training programs for workers at all levels, especially for the uneducated.
In my view, the government needs to intensif to the microfinance program by giving wider access to university graduates to establish small and medium enterprises (SMEs) to generate more jobs, it can help cope with the unemployment problem and improve net domestic products. Because it is true that we can no longer depend on foreign investments and big companies to cope with economic growth and the unemployment problem.
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