Labor regulations and industrial relations in Indonesia
Since the mid -1980s, Indonesia has rapidly deregulated. Employment opportunities, income generation capacity, and the opportunity to negotiate better working conditions have expanded. Many Indonesians are concerned that workers have not shared in economic development benefits and think that a minimum wage increase would bring bottom wages up and reduce wage differentials. Additionally, international agencies have criticized Indonesia for labor standard violations. In response, the Indonesian government has increased workers'statuary rights and removed collective bargaining obstacles. Real minimum wages doubled between 1988 and 1995. Regulation enforcement toughened. Manufacturing employment expansion has broaden statutory rights coverage, requiring enforcement. The government should close the gap between statutory rights and voluntary agreed-on working conditions. It must correct legal standards and reduce labor dispute intervention. Current labor regulations inhibit constructive discourse between workers and employers on: dismissal, dispute resolution mechanisms, and social security contributions. Appropriate legislative action in job safety and child labor is needed. Inviting public intervention rather than allowing strikes and lockouts to operate isolates negotiation from market conditions. While labor regulation should facilitate voluntary employer and worker agreements, it often discourages job creation. Keeping Indonesia's economy competitive requires an industrial relations system relying on voluntary wage and working condition negotiations. The tasks workers perform and the employers for whom they perform them must be subject to change. This process is a normal feature of healthy labor markets.
|Date of creation:||31 Aug 1996|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steve J. Davis & John Haltiwanger, 1991.
"Gross Job Creation, Gross Job Destruction and Employment Reallocation,"
NBER Working Papers
3728, National Bureau of Economic Research, Inc.
- Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August.
- Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues 91-5, Federal Reserve Bank of Chicago.
- Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186 National Bureau of Economic Research, Inc.
- Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, June.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1640. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.