Indonesia: Protests Spread Against Abolition of Sectoral Minimum Wages

Jokowi's Second-Term Administration Key Project
Opposition to Rights Violations in the 'Labor Creation Law'

[Image source=Reuters Yonhap News]

[Asia Economy Jakarta Correspondent Sujin Choi] In Indonesia, protests continue following the passage of the Job Creation Law, which centers on the abolition of sectoral minimum wage systems. The Indonesian government and parliament recently passed an omnibus bill containing 79 laws, among which the Job Creation Law has been criticized for infringing on workers' rights.

According to local media such as The Jakarta Post on the 13th, the revised Job Creation Law, strongly pushed by the Indonesian government, includes measures to expand employment and improve the business environment. To this end, it reorganizes regulations and aims to enhance the efficiency of administrative agencies to facilitate business permits and stimulate investment. This bill was a key project of President Joko Widodo’s second-term administration, drawing significant government attention.

Airlangga Hartarto, Minister of Economic Coordination and leader of the ruling Golkar Party, emphasized the revised Job Creation Law, stating, "It is essential to increase employment and improve the business environment amid the COVID-19 pandemic." He added, "We will reorganize 43,000 regulations moving forward."

However, the Job Creation Law has faced fierce opposition. On Indonesian social media, posts centered around the hashtag '#TheParliamentBetrayedThePeople' have surged, with critical messages such as 'Cancel the Omnibus Bill' and 'Unbelievable Vote' spreading rapidly. Civil society organizations have united in criticizing the revision for ignoring the constitution and pursuing only corporate interests.

The most contentious issue provoking intense backlash is the abolition of sectoral minimum wages. While sectoral wages are set by the government, the revision eliminates this system and recognizes only wages set by local governments. Regional heads can determine local minimum wages based on regional inflation and economic growth rates. Workers became enraged as this was seen as a result of corporate complaints about financial burdens. In particular, mandatory leave, a basic right for workers, was reduced, and businesses were allowed to operate additional working hours. In response to the mounting dissatisfaction, the government announced plans to establish an unemployment fund for dismissed workers. Instead of raising severance pay caps, a fund will be created to support reemployment and job training.

Concerns about environmental destruction following the passage of the Job Creation Law have also been raised. According to local media, just hours before the parliamentary vote, global investors from 36 sectors reportedly submitted letters of intent to invest over $4 trillion to the government.

This content was produced with the assistance of AI translation services.