The informal sector and women’s poverty
Razali Ritonga, Jakarta | Fri, 02/17/2012 10:54 AM
The labor protests over minimum wage demands that recently occurred in some parts of Indonesia should have been anticipated by the government.
The demonstrations revealed that the minimum wage was far from sufficient to ensure workers’ survival. Even in Jakarta, the minimum wage for 2012 remains below the income of people living in poverty, especially for workers who support a family of five or more.
The minimum wage in Jakarta for 2012 is set at Rp 1,529,150 (US$170) per month, or an average of Rp 305,830 per each household member. So, if only the breadwinner of a family of five works, all family members would be categorized as poor given the government’s poverty line benchmark of Rp 355,480 set in 2011.
The minimum spending to separate the poor from the non-poor for 2012 has not been calculated yet, but the figure is expected to increase from the 2011 mark.
The severity of poverty among formal workers is only part of the sad story of the labor sector in Indonesia. In fact, workers in the informal sector, whose number is double the formal sector workforce, endure even worse conditions.
The majority of workers employed in the informal sector are women. They mostly work as housemaids or helpers in family businesses.
Workers in the informal sector receive wages that are usually determined by employers or agreed upon by the employers and workers. Unfortunately, the wage amount is usually far below the minimum wage set by the provinces. In many cases the wage is eventually determined by additional factors, such as food and shelter shared with the owners.
Up to now, workers in the informal sector have never been involved in talks on minimum wages, partly because they don’t have unions. As we know, the minimum wage is decided by employers, labor unions and the government.
Low wages among women working in the informal sector can put this country at risk as a huge number of people cannot afford to meet their basic needs — especially food and shelter.
It is not surprising that the quality of life for so many women in this country is considered poor, as evident in the high maternal mortality rate, which stands at 228 per 100,000 live births.
It is believed that the poor quality of life among women contributes significantly to Indonesia’s low ranking on the Human Development Index (HDI) and Gender Development Index (GDI).
In 2008, for example, the value of Indonesia’s GDI was 66.38, while its HDI was 71.76 (Statistics Indonesia, 2009). From those figures, it is clear that the quality of life for women is below that of the quality of life for men.
Based on the United Nations Development Program HDI report issued in 2011, Indonesia ranks 124 among 187 countries surveyed across the world.
Indonesia’s HDI ranking is lower than its ASEAN neighbors of Singapore, Brunei Darussalam, Malaysia, Thailand and the Philippines.
The low quality of life for women could result in serious problems for the country’s future generations. The child of a poor mother will generally be more vulnerable to diseases and other health problems due to poverty.
In fact, Indonesia has a high neonatum mortality rate (under one month), infant mortality (aged under one year), and child mortality (under five years of age).
Demography and Health Surveys conducted in 2007 reported that Indonesia’s neonatum mortality rate was 19 per 1,000 live births, the infant mortality rate was 34 and the child mortality rate was 44.
The high child mortality rates are presumed to have something to do with women workers, especially those in the informal sector.
In addition to their low income, women workers often do not have enough time to visit health centers during their pregnancy.
This phenomenon should inspire the government to establish better policies to improve wages for workers in the informal sector — particularly female workers.
There are two alternative policies that could help the government deal with such problems. First, the government could include the informal sector in the minimum wage policy.
Second, the government could promote the informal sector as part of the formal sector. For this second option, the government should ease regulations to set up formal businesses.
The writer is director of population and labor force statistics at the Central Statistics Agency (BPS). The opinions expressed are his own.
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