May Day 2025: Celios Highlights Low Pay and Layoff Issues

April 29, 2025 | 05:16 pm

TEMPO.CO, Jakarta - Executive Director of the Center for Economic and Law Studies (Celios), Bhima Yudhistira, highlighted several pressing issues ahead of May Day 2025, also known as Labor Day, which is observed annually every May 1st. Typically, this day sees workers taking to the streets to voice their demands and aspirations.

Bhima pointed out a sharp decline in real wages, with growth lagging behind pre-pandemic levels. He attributed this primarily to the wage formulation within the Job Creation Law, which he argues is inadequately low compared to the rising cost of living faced by workers.

He stated that workers are increasingly forced to adopt austerity measures, resort to borrowing, or pawn their possessions to make ends meet. "The excessively low real wages also impede economic growth," Bhima asserted in a written statement on Tuesday, April 29, 2025.

Furthermore, Bhima emphasized the persistent issue of age discrimination among job applicants. He argued that job vacancies restricting applicants to the 25-31 age range hinder laid-off workers from re-entering the formal sector. He noted that Indonesian regulations seemingly permit companies to engage in age discrimination, contrasting with other ASEAN nations like Thailand and Vietnam, which have implemented anti-age discrimination regulations for job seekers.

The economist also drew attention to the prevalence of layoffs and the non-compliance of some companies in upholding workers' rights. Bhima stated that while many companies cite labor cost-cutting as the reason, some are, in fact, evading their responsibilities toward their employees.

This situation, he argued, further confirms a deteriorating economic climate, compelling companies to continuously reduce their permanent workforce. "Many companies fail to pay severance and outstanding salaries to laid-off employees. Weaknesses in labor data collection and the enforcement of sanctions against such companies are key problems," Bhima explained.

Moreover, he noted the intensifying competition within the labor market, coupled with a lack of effective government solutions. Bhima even highlighted the Danantara Investment Management Agency, which he believes has yet to address the limited job opportunities in the formal sector. Consequently, the unemployment rate among young Indonesians aged 15 to 24 has reached 17.3 percent, the highest in ASEAN.

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