UNCERTAINTIES

IN LABOUR MARKET
What are the pressing factors shaping changes
and uncertainties in our labour market?
 Two Reduce poverty
which is
substantially to
Major reshape the
society into
Challenges significant
economic power.
In shaping changes and
uncertainties in the
labour market

Provide people
with stable,
secure, highly-
productive and
appropriate jobs
to ensure a rise
in living
standards
 Indonesia Labour Market
Context
- Employment created is not sufficient to absorb the
growing global labour force
- Slow economic growth
- Large scale labour market failure
- Significant surplus labour
- Unemployment
- Chronic poor-quality employment (working poverty and
vulnerable workers)
 Conditions effecting Indonesia to prioritize the policy to reduce the
uncertainties in Job
POLITICS
External:
• The threat of US fixed
interest rate implicating to
press Indonesia’s exports.
• The trade war between
People’s Republic of China
with Japan and South Korea
resulting US’s protectionism
policy.
• Trump’s election resulting
the downgrade of investment
rating in Indonesia.
UNCERTAINTIES
Internal:
• Fragile political stability
in November and December
2016, due to the face that
massive demonstration,
indirectly impact on economy
stability.
• Rumours and issues toward
Chinese worker affecting the
investment of China in
Indonesia.
ECONOMY
Monetary Policy
Increasing inflation due to
electricity prices and vehicle
registration charges, resulting the
production in industrial sector become
fragile.
Fiscal Policy
• The national strategy to spend the
national budget in public works, job
creation, and poverty alleviation
into local sector through Village
Fund.
• The reduction in electricity subsidy
in middle-income earners to target
the accurate beneficiaries or to
those most in need.
Export Policy
The relaxation of the export ban on
unprocessed minerals have affected to
small-scale miners. Promoting
constructing smelter for main mining
exporters to ensure productivity in
the mining sector.
Deregulation Policy
Prioritising and protecting small,
 Factors Shaping Changes in Labour Market
The Rise of Individual Choice Technology Revolution
Trends: it is easier to shop around for As a result of rapid technological change,
work; most millennials expect to pursue companies today face shorter business cycles
multiple careers and change directions a and truly global competition. Few industries
few times over their working lives. As are safe from disruption. Automation,
employers adapt to this workforce trend, facilitated by better artificial
wages and opportunities will increasingly intelligence, is poised to have a major
be dictated by skills, not tenure. impact on jobs.
Shifting Demographics,
dynamic workforces
New Models of
Trends like aging Business
Service-oriented
and declining birth
business to
rates mean the days
accommodate people
of abundant labour
needs, such as on-
are drawing to an
demand transport,
end in much of the
food delivery, and
world. Sixty percent
fintech.
of people now live
in countries with
stagnant or
shrinking
workforces.
How can we navigate our labour market with a
strong social protection system?
Labor Market – Social Protection
System
ILO (2018)
Formalizing informal sectors
• adalah proses menciptakan struktur formal 39
di sektor ekonomi informal dengan tujuan 61 %
agar pekerja informal dapat memiliki akses %
terhadap hak yang sama yang dimiliki oleh
pekerja formal Sektor Formal Sektor Informal

• Tingkat pekerjaan formal yang lebih tinggi

diharapkan juga dapat berarti lebih
mudahnya pajak dan cakupan jaminan sosial.
42
• Dibutuhkan penerapan sistem yang 58 % BPS (2018)
terintegrasi antara lembaga terkait dengan %
dukungan regulasi yang jelas
Sektor Formal Sektor Informal
Labor Market – Social Protection
System
Formalizing informal sectors (examples);
• Usaha mikro di Brasil: dalam lima tahun
terakhir, sekitar 5,5 juta usaha mikro telah
diresmikan dengan mengambil paket insentif yang
mencakup pajak yang disederhanakan dan akses ke
perlindungan sosial, layanan pengembangan
bisnis, dan akses ke pasar.
• Pemulung di Kolombia: pada 2013, setelah
kampanye hukum dan advokasi selama 20 tahun,
pemulung di Bogota, atau 'recicladores' secara
resmi diakui sebagai penyedia layanan publik
dan dibayar dengan tarif tetap, berdasarkan
kontrak formal, untuk pekerjaan mereka.
Labor Market – Social Protection
System
Reliable social security system
• Bersifat inklusif
• Mudah diakses
• Ramah teknologi
• Pelayanan terstandarisasi
• Terintegrasi
 Social Protection
Cont. Social Security

• Contributory Social
Security
For those in formal/informal
employment

• Cash transfers
Popular social protection
instrument for meeting the
needs of the poor

Objectives: reducing poverty in

short or medium term, by
increasing the consumption of
poor household, encourage by
cash transfers

• Public Employment
Programs
The provision of support for
the working age poor

Government offer employment

opportunities and provides a
wage in return for the labour

Therefore, work experience and

skill acquired through PEP’s
can improve a person
employability.
 Social Protection
Cont. Social Security

• Complementary Programs
Promoting sustained improvements
in returns to labour through
improved livelihoods and
employment
Asset transfer
Lumpsum provision
Access to micro-finance
Micro-enterprise
development skills
Technical and
vocational training /
job skills or life
skills
These programs aim to reduce
poverty and enable participants to
move away from dependence on
social protection

• ALMP: Active Labour

Market Programs
 Assist the unemployed to find
work in the labour market
 Job centres, which link
unemployed to available
employment
 Providing information on
vacancies and assistance in
interview skills
 Training schemes provide soft
skill or hard skill to promote
employability

These measures do not create

Social Protection LABOUR SUPPLY
- While receipt of a
Cont. Social Security transfer or PEP wage can
lift labour supply
constraints, enabling
beneficiaries to
overcome financial
barriers to employment
- Complementary
Interventions and ALMP
can enable a range of
human and social
barriers to labour
supply to be overcome,
and improve the quality
of labour
LABOUR DEMANDsupply
- overall.
Interventions can also
impact on labour demand;
PEP create additional
employment directly
- cash transfers and
complementary
interventions can
stimulate demand for
goods and services
(spillover effects),
resulting in increased
labour demand, as well
as self-employment and
increased livelihood
returns
REFERENCES

Dong, S. X., & Manning, C. (2017). Labour-Market Developments at a Time of

Heightened Uncertainty. Bulletin of Indonesian Economic Studies, 53(1), 1–25.
https://doi.org/10.1080/00074918.2017.1326201

McCord, A. (2018). Linking Social Protection to Sustainable Employment:

Current practices and future directions. 77.

Olivier, M., & Govindjee, A. (n.d.). Protecting and Integrating Migrant

Workers in ASEAN Social Security Systems. 18.
Thank You