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1. Introduction
As international labour migration grows worldwide, trade unions have been increasingly forced to acknowledge migrant workers as a potentially important trade union constituency. It is not an easy task
for unions to accommodate migrant workers even in receiving countries, given their uncertain status as non-citizens and the temporary – and in the case of domestic workers, informal – nature of much
contemporary employment of migrants. The challenges faced by unions in sending countries are even greater, as the workers they seek or do not seek to organize are employed outside national
boundaries, and therefore outside the boundaries of traditional union activity. Indonesia is a major sending country of overseas migrant labour in Southeast Asia with an established
history of non-governmental organization NGO activism around migrant labour issues. In contrast, trade unions have played almost no role in migrant labour campaigns, let alone made any serious
attempt to organize overseas migrant workers. This is partly explained by the fact that there was little opportunity for trade union activism more generally under President Suharto’s New Order regime
1967-1998. As a result, the Indonesian trade union movement is still establishing itself locally, and overseas migrant workers are considered an extremely low priority. However, trade unions’ failure to
make any serious attempt to deal with migrant labour issues is also partly because overseas migrant workers are employed outside Indonesia, and therefore outside the national system in which those
trade unions operate. This report examines NGOs’ and trade unions’ attempts to respond to the conditions experienced by
Indonesian workers employed overseas during the recruitment, overseas and return phases of their employment experience. It draws upon reports by international agencies and international and local
NGOs, academic papers, government documents, and interviews with key informants in NGOs, trade unions and migrant worker organizations. It concludes that although some important initial cooperative
gestures have been made between migrant labour NGOs and a small number of trade unions, there is almost no political will amongst local trade unions with regard to the concerns and requirements of
overseas migrant workers. There is therefore little likelihood of significant trade union involvement in migrant labour issues in the near future.
2. Overview of the Country’s Migrant Labour Context The general labour market situation, particularly high rates of open and hidden unemployment and low
wages, act as push factors for international labour migration. Indonesia’s large official and unofficial migrant labour flows are a direct result of poor economic opportunities for working-class Indonesians
within the country itself. Indonesia has a labour surplus economy, which is unable to accommodate a large percentage of its working age population. As a result, overseas labour migration has become an
important avenue for employment of Indonesian citizens.
2.1 General Labour Market Situation Indonesia has a complex and fragmented labour market.
1
It has a low-wage economy with significant disparities between the wages paid to expatriates and high-skilled local professionals employed by
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The information in this section on the situation to 1999 draws heavily on Feridhanusetyawan 2000 and Irawan et al 2000. Statistical data for the period after 2000 cited in this report is sourced from the Bureau of Statistics and the
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companies. There are also considerable discrepancies between the wages of managerial staff and low- level employees within companies. According to the Bureau of Statistics, in March 2000 production
workers earned a median wage of between Rp. 68 500 approximately US 7.21 and Rp. 214 900 approximately US 22.62 per week depending upon the sector in which they were employed. These
wage levels are far below those that can be earned by even the worst-paid of overseas migrant workers. Indonesia’s low-wage economy is made possible by its large labour surplus in almost all sectors.
Between 1971 and 1999, the Indonesian labour force increased from 40 million to 95 million. In 1999 the overall labour participation rate in Indonesia was approximately 66 percent of the working-age
population. More recent figures indicate that the labour force participation rate has sat at around 68 percent in the period 2001-2005, with total labour force in 2005 of 105.8 million people, 94.9 million
of whom are employed Table 2.1.1 Structural mismatches mean that not only working-class Indonesians, but also Indonesians with a
secondary and tertiary education, have difficulty finding decent work. Consequently although the education level of the workforce is rising approximately 75 percent of all employed men and 80
percent of all employed women have primary school education or less, but in the 25-29 age bracket, 35-40 percent of all employed men and women have a secondary or tertiary education unemployment
has long been a major social problem in Indonesia. It also helps explain why formal sector employment overall accounts for a relatively small proportion of all employment opportunities. Only
between 30-40 percent of working men and 20-30 percent of working women are employed in waged or salaried positions. The remainder of working Indonesians are engaged in ‘independent economic
activity’ or in family businesses. The service sector, which provides employment opportunities for the majority of these ‘independent’ or family workers, is primarily informal in nature. In total, more than
50 percent of women and around 43 percent of men were employed in informal sector occupations in the late 1990s.
Official Indonesian unemployment figures are highly deceptive. In 1999, the official unemployment rate was under 7 percent, rising to just under 10 percent in 2004. These relatively low figures mask
serious underemployment and relatively low labour force participation rates. For men, the employment to population ratio a measure that is similar to labour force participation is approximately 80 percent,
while for women, has been between 40 and 50 percent. However, almost 50 percent of employed women and over 20 percent of employed men work fewer than 30 hours per week, while almost 8
percent of employed women and almost 4 percent of employed men work fewer than 10 hours per week.
Department of Manpower and Transmigration, from assorted tables available at http:www.pbs.go.id and http:www.nakertrans.go.id. For a history of Indonesian government policy regarding economic development and its
implications for employment, see Feridhanusetyawan 2000 and Manning 1998.
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Table 2.1.1: Employed Persons 15 years and Over by Main Industry, 2002-2005 Main Industry
2002 2003
2004
Agriculture, Forestry, Hunting and Fishery
40 633 627 43 042 104
40 608 019 Mining and Quarrying
631 802 732 768
1 034 716 Manufacturing Industry
12 109 997 11 495 887
11 070 498 Electricity, Gas, and Water
178 279 151 831
228 297 Construction
4 273 914 4 054 741
4 540 102 Wholesale Trade, Retail Trade,
Restaurants and Hotels 17 795 030
17 249 484 19 119 156
Transportation, Storage, and Communications
4 672 584 4 939 665
5 480 527 Financing, Insurance, Real Estate
and Business Services 99 1745
1 306 551 1 125 056
Community, Social, and Personal Services
10 360 188 9837 760
10 515 665
Total 91 647 166
92 810 791 93 722 036
Source: Badan Pusat Statistik 2005 based on National Labour Force Survey Data
2002-2005 The agricultural sector contributes relatively little to the country’s GDP 16 percent in 1997.
However, as Table 2.1.1 demonstrates it remains a major source of employment in Indonesia. Although employment in the sector has shrunk as a proportion of the overall labour force, it still
accounted for approximately 40 percent of all employment in 1999 down from 64 percent in 1971, rising again to 45 percent in 2003.
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In contrast, the industrial sector accounts for a relatively small proportion of all employment opportunities approximately 18 percent in 1999, but contributes over
two times as much to the economy 34 percent in 1997. In 1999, manufacturing accounted for approximately 20 percent of all male employment and 15 percent of all female employment. In 2003,
47 percent of women were employed in agriculture and 14 percent in manufacturing. The profile of men and women working in particular industries varies considerably. The latest figures
available from the Department of Manpower and Transmigration demonstrate that while most women continue to work in agriculture, women are most concentrated in manufacturing and trade Table 2.1.2;
see also Table 2.1.3 for an inter-island comparison.
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Indonesian statistics are problematic, so these and other figures cited in this report should be treated as indicative rather than as authoritative.
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Table 2.1.2: Employed Persons by Sex and Main Industry, 2003 Industry
Male thousand
Female thousand
Total thousand
Females as Total
Female Employment
Agriculture 27 385
14 616 42 001
34.8 47.3
Manufacturing 6 539
4 388 10 927
40.2 14.2
Construction 3 977
130 4 107
3.2 0.4
Trade 9 303
7 543 16 846
44.8 24.4
Transport 4 814
163 4 977
3.3 0.5
Finance 953
342 1 295
26.4 1.1
Services 6 151
3 595 9 746
36.9 11.6
Other 786
99 885
11.2 2.5
Total 59 909
30 876 90 785