Indonesia urged to implement unemployment insurance scheme

This type of insurance will safeguard workers' rights, researcher says

Indonesia urged to implement unemployment insurance scheme

Insurance News

By Gabriel Olano

A think tank has urged Indonesia to create an unemployment insurance scheme and implement other measures to safeguard workers’ rights.

The Institute for Development of Economics and Finance (INDEF), through researcher Bhima Yudhistira, said that Jakarta should implement unemployment insurance, which will act as a safety net to ensure workers’ salaries meet the minimum wage regulations.

“In this hire-and-fire context, workers might not get decent pay even at the amount of the minimum wage,” The Jakarta Post quoted him as saying at a seminar on an omnibus bill on job creation.

The Office of the Coordinating Economics Minister said that the bill will lay the ground for hourly-based employment in some industries – such as consultants, freelancers, and those working at start-ups. However, labour unions have expressed disapproval to the bill, as it could end up enabling violations of workers’ rights to decent pay.

According to Bhima, under an hourly-based scheme, employers will be more likely to outsource tasks which will leave employees in a more vulnerable position. Thus, he called for the government to review which types of jobs should be included in the scheme.

Bhima also raised the importance of unemployment insurance, which was necessary in the creation of outsourcing and hourly pay systems, which has worked in developed countries. This type of insurance would allow the government to provide training for unemployed individuals, as well as other benefits.

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