Is this year’s Labor Day a milestone? Agung Pamungkas  ;   The writer has recently completed a study on immigrants’ social and labor rights in the UK

JAKARTA POST, 30 April 2014

                                                

                                                                                         

                                                             

A milestone is defined as an important event in the development or history of something or in someone’s life. For Indonesia’s workers and unions, 2014 could be a milestone. It is the first time in Indonesian history that Labor Day, also known as May Day, is officially a national holiday. In the commemoration of International Workers’ Day in 2013, President Susilo Bambang Yudhoyono joined other Southeast Asian countries that had established May 1 as a national holiday. But what does this really mean for workers? Is it merely a day off well spent with their families? Labor Day should go beyond a celebration. It is the pursuit of better living — improved working conditions and wage raises. The unions’ plan to hold marches comprising 1 million workers across 20 provinces stresses the theme of “Restructuring Indonesia toward a prosperous country”, to increase reform demands in labor welfare policies. Of the 10 demands made by the Indonesian Worker Confederation, two fundamental issues are highlighted: wage hikes and inclusive social protection. These concerns seem to be in line with the International Labor Organization (ILO) report on labor and social trends in 2013, highlighting that access to social protection and wages remain the challenges for workers in Indonesia. First, workers are demanding an increase in the national minimum wage of 30 percent in 2015. The minimum wage is one instrument to lift them out of poverty. In 2013, we witnessed an increased provincial minimum wage of 40 percent in Jakarta. Despite the fact an increased minimum wage in Indonesia in the last four years being the highest in Southeast Asia, the figure shows that Indonesia still has a relatively low minimum wage compared to Thailand, Malaysia and the Philippines. According to the Indonesian Chamber of Commerce and Industry (Kadin), however, the increase in the minimum wage has not been followed by higher labor productivity. According to the ILO and the World Bank, Indonesia’s average minimum wage rose by 5.5 percent between 2000 and 2011, but its productivity merely increased by 3.4 percent. In China and Vietnam, an increased minimum wage has led to a higher percentage of labor productivity. As the ASEAN single market comes into force in 2015, the government is obliged to protect the welfare of workers from the competitive market. How do we ensure that wage raises contribute to labor productivity? The answer might be related to the workers’ second demand — a fully fledged social safety net. Workers are demanding a basic level of social protection: pensions, health care, education, housing and affordable public transportation. On Jan. 1 the government launched a universal healthcare program that merged all other social insurance programs under a single-payer umbrella. This program is being delivered to 121 million people, or 48 percent of the population, comprising 86.4 million beneficiaries of the former healthcare program (Jamkesmas), 16 million Askes holders among civil servants and 7 million state-insurance program Jamsostek holders. Even though workers are entitled to their basic rights, they are not out of the woods yet. The ILO report identified significant policy gaps and implementation issues, which exclude “non-poor” workers (workers not officially categorized as poor but with low income) in the informal economy. Social security coverage is limited due to both high levels of contribution evasion and inefficient targeting. One way to realize these demands is to empower workers with relevant job-training. Also, both employers and the government have to provide assurances that workers are covered by social protection as well as the minimum wage. That way, Labor Day could be seen a milestone in Indonesia’s history. ●