May Day 2025: Workers Are Not Just Economic Movers, But The Main Subject Of National Development

JAKARTA Low real wages and high layoffs (PHK) are still problems faced by Indonesian working class in the midst of May Day celebrations or International Labor Day.

President Prabowo Subianto did keep his promise by attending the commemoration of International Labor Day at the Jakarta National Monument (Monas) on Thursday, May 1, 2025. Prabowo's arrival was of course greeted enthusiastically by thousands of workers who attended Monas.

"Thank you for the honor given to me. I was invited to come with you, this is a great honor for me. Thank you, thank you," said President Prabowo Subianto.

In his oration, Prabowo mentioned a number of promises, including forming a National Labor Welfare Council, removing outsourcing, and forming a Mitigation Task Force.

However, the commemoration of Labor Day is not just ceremonial. There are a pile of problems faced by Indonesian working class, even though they are the wheels of the country's economy.

In the midst of the commemoration of International Labor Day, working classes in Indonesia are facing a number of complicated problems. These include a decrease in wages, a high layoff rate, and the rise of unemployment at a young age.

Executive Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira revealed a number of problems faced by working class or laborers.

According to him, real wages experienced a sharp decline and growth was lower than pre-pandemic. The decrease in wages, said Bhima, was due to problems in the wage formulation listed in the Job Creation Law (UU Ciptaker).

"The main cause is because the wage formulation in the Job Creation Law is too low compared to the increase in expenses borne," Bhima told VOI.

This means that workers must survive by saving money, borrowing money or pawning their assets such as houses, motorized vehicles, and others. Real wages that are too low also cause economic growth to slow down.

The problem of age discrimination in the world of work is also in the spotlight. He gave an example of the age limit requirements for applicants between 25 and 31 years, causing it difficult for layoff victims to return to work in the formal sector. In fact, many victims of layoffs are over 30 years old.

Regulations in Indonesia are also considered to allow companies to discriminate, in contrast to ASEAN countries such as Thailand and Vietnam which apply anti-discrimination regulations for the age of job applicants.

"Hopefully the revision of the Manpower Law can accommodate specific articles regarding anti-discrimination of the age of job applicants," he said.

Bhima also said that Indonesia has the number of unemployed at a young age, which is the age range of 15 to 24 years. The number is 17.3 percent of the total number of unemployed in Indonesia and is the highest in the Southeast Asia region.

Meanwhile, the new workforce has increased by 4.4 as well as people throughout 2024 and must compete with laid-off workers. The existence of Danantara is also considered not yet able to solve the narrow problem of employment in the formal sector.

"The competition for workers is getting tighter and there is no real solution from the government. No policy packages have yet been issued to reduce the turmoil in layoffs. Meanwhile, the layoffs Task Force is not preventive," Bhima explained.

The layoff storm that occurred in Indonesia was exacerbated by the large number of companies that did not pay severance pay and the remaining salaries of employees. Weak labor data collection and enforcement sanctions for companies are the cause.

With the layoff task force, they are expected to collect data on the victims of layoffs both in the formal and informal sectors accurately. This data can be used as a basis for fulfilling the rights of layoff victims.

In addition, a number of companies also laid off in order to replace permanent employees with internships, outsourced, and contracts. Although it is reasonable to reduce operational costs, Bhima said this is part of the company's efforts to avoid the responsibility of permanent workers' rights.

"This situation also confirms that the economy is deteriorating so that the company continues to reduce the number of permanent workers.

Those affected by layoffs switch to being involved in the informal digital-economy sector such as online motorcycle taxis and couriers due to limited employment in the formal sector. About 58 percent of jobs in Indonesia are informal sectors, creating work vulnerabilities, the absence of career paths and work hours that are too high.

"The competition for workers is getting tighter and there is no real solution from the government," he explained.

On the other hand, economist from the Institute for Development of Economics and Finance (Indef) Didik J. Rachbini said workers are not just the driving force of the economy, but the main subject of national development.

Therefore, the commemoration of Labor Day must be a place to strengthen collective commitments to create a productive and humane work ecosystem.

"Productivity should not only be judged from output. It must be born from a healthy, fair, and human work process," explained Didik.

On the same occasion, Didik highlighted the large number of workers who have not fully enjoyed their rights, including decent wages, legal protection, and job certainty.

In fact, protection of workers is not just a moral obligation, but a long-term strategy for stability and business sustainability.

"Protection is not a burden, but an investment. Investment creates loyalty, stability, and a work spirit," said Didik.

Didik emphasized that there was no successful economic development without prosperous workers. "If workers are prosperous, almost all the people are prosperous, and if the people are prosperous, the nation will progress," he said.