Young Workers in the Urban Industrial Sector in the Context of the Impact of the 2008/09 Global Financial Crisis


ABSTRACT

At a time when many countries were experiencing negative economic growth as a consequence of the 2008/09 global financial crisis (GFC), the Indonesian economy continued to grow positively. Nevertheless, it did not completely escape the negative effect of the 2008/09 GFC, which took the form of a reduction in growth. This reduction in itself had an impact in that it weakened the capacity of the economy to absorb labor. The present report is the outcome of quantitative research concerning labor in urban areas in Kota Samarinda and Kota Tangerang in the context of the 2008/09 GFC. The study is a part of the Monitoring the Socioeconomic Impact of the 2008/09 GFC in Indonesia research, which has been carried out by The SMERU Research Institute since July 2009. In general, the findings of the present study indicate that many companies, especially those that are export-oriented, have been affected by the impact of the crisis, yet at the same time most workers did not feel the effects because the economy was restored relatively quickly. In the two study locations, the livelihoods of industrial workers are still of some concern, particularly if linked to hopes of improved welfare as a result of policies related to the current shift in the structure of the economy from agriculture to industry. The level of unemployment is still high and it influences the already low bargaining position of workers. The bargaining position of workers has become weaker as a consequence of the expansion in the practice of outsourcing, which has made workers’ lives more difficult. Furthermore, the minimum wage tends to be applied by companies as a maximum wage. In this connection, in addition to acting as the maker of regulations (wages), the government should seek to be the enforcer of regulations that aim for workers to obtain a wage that is adequate to meet the requirements of a proper life.

Keywords: global financial crisis, labor force, urban