Demonstration Indonesian Workers: Protesting against Layoffs & Demanding for Higher Wages

In recent years Indonesia’s economic growth has been slowing due to the sluggish global economy, low commodity prices, Bank Indonesia’s high interest rate environment (necessary to combat high inflation, curb the country’s wide current account deficit, and support the ailing rupiah), and weak government spending. In the second quarter of 2015 GDP growth eased to a six-year low of 4.67 percent (y/y). As each 1 percent GDP growth is estimated to generate between 200,000 and 300,000 new jobs in Indonesia it is important for the government to boost economic growth in order to generate enough jobs for the two million new Indonesian job seekers that enter the labor force each year. According to the latest data from Statistics Indonesia (BPS), the country's unemployment rate stood at 5.81 percent in February 2015 (BPS publishes unemployment data twice per year). However, a point of criticism often ventilated by analysts is that this official figure does not cover the informal sector.

Indonesian Labor Force:

	2011	2012	2013	2014	2015¹
Labor Force	119,399,375	120,320,000	120,170,000	121,870,000	128,300,000
- Working	111,281,744	113,010,000	112,760,000	114,630,000	120,850,000
- Unemployed	8,117,631	7,310,000	7,410,000	7,240,000	7,450,000

^{¹ in February 2015
Source: Statistics Indonesia}

Indonesia's Quarterly GDP Growth 2009–2015 (annual % change):

Year	Quarter I	Quarter II	Quarter III	Quarter IV
2015	4.72	4.67
2014	5.14	5.03	4.92	5.01
2013	6.03	5.81	5.62	5.72
2012	6.29	6.36	6.17	6.11
2011	6.45	6.52	6.49	6.50
2010	5.99	6.29	5.81	6.81
2009	4.60	4.37	4.31	4.58

^{Source: Statistics Indonesia (BPS)}

Therefore, the mass protest is aimed at increasing pressure on the government to boost the nation’s economic growth. According to media reports, thousands of jobs have been shed in Indonesia’s labor-intensive industries in recent months. The Indonesian Workers Confederation, which has approximately two million members, expects to see the total number of layoffs go up to 100,000 in 2015.

Meanwhile, high inflation (the result of recent fuel subsidy reforms and the weak rupiah) has led to weakening purchasing power of Indonesians. In July 2015, headline inflation stood at 7.26 percent (y/y), the highest inflation rate in the Southeast Asian region. High inflation is a major concern for Southeast Asia’s largest economy as a large portion of the Indonesian population lives just above the poverty line. As such, severe inflationary pressures can push these people into poverty.

Inflation in Indonesia:

Month	Monthly Growth           2013	Monthly Growth           2014	Monthly Growth           2015
January	1.03%	1.07%	-0.24%
February	0.75%	0.26%	-0.36%
March	0.63%	0.08%	0.17%
April	-0.10%	-0.02%	0.36%
May	-0.03%	0.16%	0.50%
June	1.03%	0.43%	0.54%
July	3.29%	0.93%	0.93%
August	1.12%	0.47%
September	-0.35%	0.27%
October	0.09%	0.47%
November	0.12%	1.50%
December	0.55%	2.46%
Total	8.38%	8.36%	1.90%

^{Source: Statistics Indonesia (BPS)}

Inflation in Indonesia 2008-2014:

	2008	2009	2010	2011	2012	2013	2014
Inflation (annual percent change)	9.8	4.8	5.1	5.4	4.3	8.4	8.4

^{Source: World Bank}

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Putri Khanza | 31 August 2015 19:47

saatnya pemerintah lebih memperhatikan keberadaan rakyat kecil. kebijakan yang dibuat sebaiknya pro rakyat demi terciptanya stabilitas sosial ekonomi yang berkesinambungan. Terimakasih sharingnya, pengetahuan bertambah dari sebelumnya. Sungguh sebuah kebaikan bagi kakak penulis.