Labor’ Social Welfare Related to Health in Indonesia

In 2015, all 193 United Nations (UN) member countries signed on the UN Sustainable Development Goals (SDGs) for 2030, paying attention to labor in SDG 8: Decent Work and Economic Growth. It promotes sustained, inclusive and sustainable economic growth, full and productive employment and dignified work for all. To ensure the accomplishment of the SDG 8, two main points to be taken into account are the minimum wage and the social protection to guarantee a better social welfare of the labor. In Indonesia context, health insurance is regulated by the Health Care and Social Security Agency (BPJS Kesehatan) while the others are controlled by the Workers Social Security Agency or called BPJS Ketenagakerjaan (BPJamsostek). According to regulation No. 40/2004 about national social welfare system article 18, it states that the social welfare program consists of five things namely health insurance, work accident insurance, old-age insurance, pension insurance, and death insurance. Ideally, workers are covered by at least the minimum wage and social protection (BPJS Kesehatan and BPJS Ketenagakerjaan) to sustain their social welfare. Nevertheless, how the government ensures that all workers obtain their rights from the companies? This essay will elaborate on the challenges to achieving the SDGs in Indonesia particularly in wage and social welfare policies to perform better labor market governance.

First, the increase in the new city-regional minimum wage (UMK) and the provincial minimum wage (UMP) is an annual adjustment to workers’ monthly incomes. The increase in the new minimum wage has continuously drawn attention to both employers and employees. An adjustment for the 2020 minimum wage has been announced in November from 8.03% to 8.51%. The Manpower Minister Hanif Dhakiri has signed in the ministry letter No. 308/2019. The letter states that an increase was based on data issued by Statistics Indonesia Agency (BPS) on inflation of 3.39% and economic growth of 5.12% percent. An increasing of labor’ salary more than the inflation rate is a positive sign for labor’ social welfare in Indonesia. To protect labor’s right, the Government of Indonesia (GoI) has stipulated the 2003 Labor Law number 13. The article 90 verse 1 stated that “Employers are prohibited from paying wages lower than the minimum wage”. According to the regulation, business owners shall comply with the regulation and pay the minimum salary. Unfortunately, the government has not been able to guarantee the labor’s minimum wage paid in all business sectors. According to Idris Idham’s statement, the chairman of the central executive board (DPP) of Federation of Reformed Pharmacy and Health Trade Unions (FSP Reform Farkes), many health service providers have been reported being underpaid especially for workers in hospital and clinic workers in 2018.

Second, one of the issues that requires special attention is the pension group as the global life expectancy has raised by 5.5 years to 72.0 years between 2000  and 2016. The Deloitte mentioned the number of people over 65 will be approximately 560 million globally by 2017. Moreover, according to current mortality risks in world health statistics report by the World Health Organization (WHO) in 2019, boys are predicted to live on average 69.8 years while girls are 4.4 years longer – 74.2 years. Labor should prepare their pension time due to the fact that life expectancy is increasing over the year. Investing in pension not only enhance their awareness about prosperous living after retirement but also to spread the information and eradicate the nescience of inhabitant. There is a presidential regulation (Perpres) No. 82/2018 that points out health insurance for workers. The number of workers registered with the BPJS Ketenagakerjaan is only 56% of the total employers who are eligible to participate in from 566,591 companies in February 2011. Based on the Manpower Ministry data, only 30.46 million workers are covered with social security namely BPJS Ketenagakerjaan until last year. The number, however, is higher than the data in 2017 (28 million people). The government expects to have 62.4 million employees joining in the employment-related social security program and this envision needs a considerable rise in compliance.

In order to tackle the above-mentioned problem and issues, the GoI should be able to check compliance of the companies for paying the minimum wage and providing both BPJS Kesehatan and BPJS Kesehatan. Indeed, the Manpower ministry and both agencies’ website have established its own whistle-blowing system. Despite, it is not yet effective due to the lack of awareness of the labor to report in the system. The Indonesian Institute (TII) recommends several steps for national health insurance implementation, including program socialization, strengthening bureaucracy (the agency), e-government optimization to increase participation, efficiency, effectiveness, transparency, and accountability so the public can easily control. M. Yamin Pahlevi, Deputy Director of the Bali Region, Nusa Tenggara, Papua (Banuspa) BPJS Ketenagakerjaan, mentions limiting public services to companies that are still reluctant to register their workers as social security participants. In addition, government regulation (PP) No. 86/2013 imposes administrative sanctions in organizing social security to employers. Yet, the general secretary of All Indonesian Workers’ Organization (OPSI), Timboel Siregar, stated that in reality, the sanctions are not effective because it has not been supported by the regional government and the institutions. He also mentioned that there is no integrated coordination between the government and the BPJS Ketenagakerjaan.

Furthermore, BPS provides data about the percentage of workers earn less than the minimum wage. What is needed is an integrated system on the authorities that guarantee all workers’ right and a political willingness to perform justice for both labor and companies. Parallel activities to the establishment of social welfare for labor and procedures to reduce unequal access to service should be implemented. Thus, the dialogue between labor unions, government, and companies should be promoted to ensure the participation by the national and local government. Labor inspection is still needed for strengthening compliance through grievance inspection and enforcement of employment laws and regulations.

To sum up, both the employers and workers are facing tougher challenges ahead especially to increase labor’ social welfare. All suggested by reference is important. Nevertheless, In my personal opinion, there are three important stages to be implemented as a foundation to solve the problem. Firstly, manpower and social welfare policies should be designed not only to tackle the problem but also to perform punishment for companies. All of this could be enforceable through an integrated system with the advancement of technology connected the data from all authority related. The GoI consisting of the Manpower ministry and both agencies (BPJS Ketenagakerjaan and BPJS Kesehatan) needs political will and courage to put labor market as an urgent national policy priority to transform the labor market. Last but not least, increasing the awareness of labor individually on legal aspect, especially on their rights, is important considering that they are the main actor of these issues. Under the existing system, the minimum wage increase and social welfare protection is fair enough and should, therefore, be implemented in order to start a foundation in the human’s right to get better social welfare.

This is one of my own perspectives that written in October 2019 to submit an essay and discuss Labor' issue. 
Happy International Labor Day!

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