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Wage and Labor Union in Manufacturing Sector

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  • Pipit Pitriyan

    ()
    (Department of Economics, Padjadjaran University)

  • Adiatma Y.M Siregar

    ()
    (Department of Economics, Padjadjaran University)

Abstract

The presence of Labor Unions is expected to provide a higher bargaining power for its members so that the rights of workers can be better acknowledged. In Indonesia, presently, the role of unions is more highlighted in the determination of the minimum wage. This study aims to estimate the the role of labor union on wage determination of Indonesia’s labor intensive manufacturing sector and whether wage differentials occurs among labor union member/non-member of Indonesia’s labor intensive manufacturing sector. Using the SAKERNAS 2007 data, the wage equation concludes that being a labor union member, is associated with higher wage payment received and wage differential between union and union members occurs. Meanwhile, Oaxaca Blinder Decomposition results show us that the wage differential between union and non-union is not negligible, particularly in automotive sector.

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File URL: http://lp3e.fe.unpad.ac.id/wopeds/201203.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by Department of Economics, Padjadjaran University in its series Working Papers in Economics and Development Studies (WoPEDS) with number 201203.

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Length: 25 pages
Date of creation: Aug 2012
Date of revision: Aug 2012
Handle: RePEc:unp:wpaper:201203

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Keywords: Wage; labor union; manufacturing;

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