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Jakarta Post

Govt policies ineffective at meeting workers' real need for cash, says labor NGO

  • Budi Sutrisno

    The Jakarta Post

Jakarta   /   Tue, May 19, 2020   /   03:19 pm
Govt policies ineffective at meeting workers' real need for cash, says labor NGO A person holds up a smartphone showing the applicant registration page on the government's preemployment card mobile app, on April 20 in Jakarta. (Antara/Aditya Pradana Putra)

The Trade Union Rights Centre (TURC) is calling on the government to reallocate its funding for the preemployment training program as cash assistance while pushing for stronger supervision of businesses to prevent further layoffs.

The non-governmental labor advocacy and research organization has pointed out that several of the government's COVID-19 policies have not contributed to overcoming the resulting employment crisis,, including the preemployment card training and incentives program for unemployed workers and the holiday bonus (THR) installment payment policy for Idul Fitri.

The preemployment card program, which has been allocated Rp 20 trillion (US$1.35 billion) from the 2020 state budget, aims to assist 5.6 million eligible workers and small business owners affected by the health crisis.

“The government’s role is crucial in allocating trillions of rupiah from the state budget effectively and on target to protect workers and to [prevent] hunger and an increase in poor people,” TURC executive director Andriko Otang said in a statement on Sunday.

The Manpower Ministry's records show that about 1.7 million workers have been laid off, terminated or lost their jobs as a direct effect of the COVID-19 epidemic in Indonesia. The figure comprises 1.4 formal workers and 300,000 informal workers.

In an online survey on the preemployment card program conducted from May 1 to 11, the TURC found that 54 percent of potential applicants were interested in the program because of the cash incentive, 30 percent wanted to acquire new skills, 16 percent were simply curious and 8 percent wanted to find a job.

Otang said that the majority of jobless workers needed cash aid, and that the preemployment card program was ineffective at helping them find jobs since the program offered training to participants without any job placement on completing their training.

Read also: Preemployment card draws criticism as workers ‘need cash aid’

“Therefore, the training fund for the preemployment card program must be reallocated as [direct] assistance for workers,” he said, adding that direct cash transfers could help maintain buying power among workers of the poor to middle classes.

The ministry also recorded that 34,179 Indonesian migrant workers had not been able to depart for their jobs abroad, and that 465 Indonesian apprentices in Japan had been repatriated. 

Meanwhile, the Agency for the Protection of Indonesian Migrant Workers (BP2MI) estimates that 34,300 migrant workers will return to Indonesia in May-June because of the COVID-19 pandemic.

The TURC survey also found the different ways in which formal workers had been affected by the economic impacts of COVID-19, including termination without severance pay, temporary layoffs with partial pay and working on-site or from home with partial pay.

Middle-class employees, who spend about Rp 1.2 million to Rp 6 million per month, were the most affected group, followed by the aspiring middle class, whose monthly spending ranged from Rp 500,000 to Rp 1.2 million, the survey found.

Otang said that although the government had offered several incentives to businesses to support them during the crisis, supervision had been weak in preventing layoffs.

“The weak point is that the state has not encouraged the relevant institutions to [maintain] data on the companies that have received the government incentives,” he said. 

Read also: COVID-19 forces restaurants, retailers to cut wages, furlough employees

He stressed that this shortcoming prevented public monitoring to make sure that beneficiary companies were not laying off their workers, and that the government must issue a regulation on supervising its incentive programs for businesses.

Orang also called on the Manpower Ministry to withdraw its recently issued circular that allowed companies to defer paying the THR to employees or to pay the THR in installments. He said that the move “gave the impression that the government prioritizes incentivizing businesses rather than protecting workers’ rights”.

“The government should better understand the vulnerability of workers who have to meet their needs,” he said, citing the survey results that showed 78 percent of workers disagreed with the government's THR policy.

In addition, Otang called on the government to instruct the Workers Social Security Agency (BPJS Ketenagakerjaan) to start paying old-age security (JHT) to workers, an idea that 81 percent of survey respondents supported.

“The reason is that the pandemic has resulted in workers receiving incomplete or unsteady incomes, reducing their capacity to meet their daily needs,” he said.