Mhd Rio Alpin Pulungan, Jakarta – The Labor Party's Economic Affairs Spokesperson, Gede Sandra, has spoken out that the Job Creation Law has negatively impacted workers' welfare, particularly through a decline in purchasing power. This is because the regulation allows the concept of minimum wages to low wages, threatening workers' welfare.

"The biggest problem among our members, particularly the working class, is their declining purchasing power," Gede told Tempo on Tuesday, August 20.

Gede noted that wage increases have only been around one percent per year, lagging behind inflation rates which reached 3 to 4 percent in recent years. This resulted in a decrease in real income for workers.

The decline in purchasing power is exacerbated by the increasingly uncertain conditions of work contract systems. Gede said that the Job Creation Law allows the contract systems to be extended indefinitely, meaning that there is no assurance for workers to be permanent workers.

"The law's extension of contract systems and increased outsourcing practices have further undermined job stability," he remarked.

Additionally, the Job Creation Law's severance pay provisions are detrimental to workers. "In the past, we could get severance pay of up to 12 or even 16 times of our salary, now it's only 3 to 6 times of our salary. This is very unfair," he underlined.

Therefore, the Labor Party urged the government to immediately review and revise the Job Creation Law to address these detrimental effects on worker welfare.

On Tuesday, August 20, 2024, the Confederation of Indonesian Trade Unions (KSPI) and the Labor Party held simultaneous demonstrations throughout Indonesia, demanding the revocation of the Job Creation Law.

The rally took place at the Constitutional Court Building with protestors gathering at the Horse Statue area in Monas. President of the Labor Party, Said Iqbal, reported that around 200 people participated in the protests.

The demonstrators also expressed support for the Constitutional Court's decision to grant the Labor Party's judicial review request regarding the age limit for regional head candidates regulated in the Regional Election Law.

Source: https://en.tempo.co/read/1906582/job-creation-law-erodes-workers-purchasing-power-labor-part