IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Labor regulations and industrial relations in Indonesia

Listed author(s):
  • Cox Edwards, Alejandra
Registered author(s):

    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.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1640.

    in new window

    Date of creation: 31 Aug 1996
    Handle: RePEc:wbk:wbrwps:1640
    Contact details of provider: Postal:
    1818 H Street, N.W., Washington, DC 20433

    Phone: (202) 477-1234
    Web page:

    More information through EDIRC

    References listed on IDEAS
    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.:

    in new window

    1. 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, January.
    2. 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.
    3. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 819-863.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    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 you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.