Tuesday 1 May 2018 is a public holiday in Indonesia as workers are given a free day to celebrate International Workers' Day (also known as May Day). This day has been a public holiday in Indonesia since 2014. Traditionally, thousands of Indonesian workers take it to the streets in the nation's bigger cities to voice demands for better income and more supportive policies by the government.
The demonstrations, which were peaceful, were organized by several labor unions including the Indonesian Working People Confederation (in Indonesian: Konfederasi Rakyat Pekerja Indonesia, or KRPI) and Confederation of Indonesian Trade Unions (in Indonesian: Konfederasi Serikat Pekerja Indonesia, or KSPI).
It is estimated that in total 3 million Indonesian workers went on the streets, across the country, to demonstrate today. KSPI said it organized demonstrations in 200 districts and cities across 25 provinces, with the participation of about one million workers.
In essence, there are three key matters that are at the center of the protests:
(1) the government is urged to raise subsidies (thus lowering prices of rice, electricity, fuel but also of housing and education),
(2) the government is urged to oppose low-skilled (or unskilled) labor from China,
(3) the government is urged to oppose low wages.
Besides the aforementioned key issues, labor unions also criticized the government for its "cashless society" program because this program results in job shedding in several industries such as the toll road, banking, retail and automotive industries.
Meanwhile, there were also hundreds of women's rights activists who urged the government to undertake more efforts to stop discrimination, gender inequality, as well as violence (including sexual harassment) against women in Indonesian society (especially in the work place).
Protester Urge the Government to Raise Subsidies
During Joko Widodo's presidency the government has been eagerly cutting subsidy spending and redirect the available funds to structural economic (particularly on infrastructure) and social development. Although the government's policy strengthens the macro-economy of Indonesia, it is negative for the workers as they are plagued by inflationary pressures, hence their purchasing power reduces.
The Issue/Hoax of Unskilled Foreign Workers in Indonesia
Secondly, there were many protests against Presidential Regulation No. 20/2018 on the Use of Foreign Workers in Indonesia. This regulation makes it easier for skilled foreign workers to enter and work in Indonesia. However, Indonesian workers are concerned that the rising number of foreign workers in Indonesia will also mean that their jobs will be taken over by foreigners.
It is true that the number of skilled foreign workers is on the rise in Indonesia as foreign direct investment (FDI) is continuously rising. The Indonesian government is eager to boost FDI in order to encourage economic growth as well as the opening of new jobs for the local population. However - although data between various government institutions vary - the number of foreign workers in Indonesia is relatively low, and thus stories about overflows of Chinese unskilled workers are merely hoaxes (designed for political motives).
Protesters argue that Presidential Regulation No. 20/2018 is in conflict with the country's 1945 Constitution, and also goes against the aspiration of the Indonesian people. Meanwhile, protesters also oppose a 2016 presidential regulation that provides visa-free access to citizens of many nations (a strategy to boost foreign tourist arrivals in Indonesia). However, this regulation makes it easier for foreigners to enter Indonesia and work illegally. This is indeed a problem. Recently, there have been several reports of illegal unskilled foreign workers in Indonesia.
The Issue of Low Minimum Wages
In late 2015 Indonesia issued Government Regulation no. 78/2015 on Wages. Part of this regulation was the cap on minimum wage growth. In the years before the regulation, minimum wages had grown rapidly in some provinces (touching double-digit figures). This made the investment climate unappealing and therefore some companies (for example footwear companies) decided to relocate their plants to other parts of Southeast Asia to enjoy lower minimum wages. The relocation of a factory means that hundreds - or thousands - of jobs are lost.
Sharply rising minimum wages in Indonesia was a big concern for (both existing and potential future) investors and led to a high degree of financial uncertainty. Therefore, a formula was introduced to limit minimum wage growth (the annual inflation rate + annual GDP growth rate became the ceiling).
Politicizing International Workers' Day
While not allowed by regulations (because the campaign period will start later this year), presidential candidate Prabowo Subianto used labor day for his presidential campaign, promising he would undertake 10 steps to improve the lives of the workers if he would be chosen as president for the 2019-2024 period. Said Iqbal, Chairman of KSPI, said that his union will support Prabowo in the 2019 election.
Poll Indonesia Investments:
Who would you vote for in Indonesia's 2019 presidential election?
Voting possible: -
- Joko Widodo (57.8%)
- Prabowo Subianto (32%)
- No opinion (5.7%)
- Someone else (4.6%)
Total amount of votes: 16210