Productivity Still Lagging Behind, Labor Competence Needs to Be Improved

Indonesia's labor productivity is still in fifth position in Southeast Asia.

KOMPAS/TOTOK WIJAYANTO

The garment production activities of PT Pan Brothers Tbk in Tangerang, Banten on Monday (27/3/2023). With a workforce of 30,000 people, Pan Brothers has a production capacity of up to 117 million pieces of garments equivalent to polo shirts per year. Of that amount, 97 percent is for fulfilling export demand.

JAKARTA, KOMPAS — Indonesia needs to continue to increase productivity and the quantity of labor/labor absorption so that it can become a developed country. Improving these two things will lead to increased competitiveness manufacturing industry and ultimately encourage economic growth.

Head of Employment of the Indonesian Employers' Association (Apindo) Bob Azam said, labor productivity in this country is still lagging behind and needs to continue to be improved .

This is reflected in part in research carried out by the International Labour Organization (ILO), which shows that Indonesia's workforce productivity is only ranked fifth in Southeast Asia in 2021. Indonesia's workforce productivity is below that of Singapore, Brunei Darussalam, Malaysia, and Thailand.

Every worker in Indonesia contributes 12.96 US dollars per hour of work to gross domestic product (GDP) in 2021. The productivity of Indonesian workers is still below that of Singapore (74.15 dollars USA/person/hour), Brunei Darussalam (55.92 US dollars/person/hour), Malaysia (25.59 US dollars/person/hour), and Thailand (15.06 US dollars/person/hour).

"We are concerned about this. In Southeast Asia alone, we are only in fifth place. So, this is not a trivial matter because it concerns the competitiveness of the next generation. We need to allocate a lot of time, energy, and resources to enhance our skills in the future so that we can at least compete in Southeast Asia," said Bob during the International Workers' Day celebration event in the PT Puninar Logistic warehousing area in Cakung, East Jakarta, on Wednesday (1/5/2024).

In addition to productivity issues, according to Bob, Indonesia still faces a high level of unemployment. Quoting the latest data from the Central Statistics Agency (BPS), the number of unemployed in August 2023 reached 7.86 million people.

Bob said that one of the efforts that can be made is to encourage more investment, especially in labor-intensive manufacturing sectors. The manufacturing industry can absorb a lot of employment and have a domino effect on the economy, ultimately driving macroeconomic growth.

In Southeast Asia alone we are only number five. So, this is no joke, because it concerns the competitiveness of the next generation.

However, the manufacturing industry is the largest contributor to Indonesia's economy. Quoting data from the Central Statistics Agency (BPS), the manufacturing industry contributed 18.67 percent of Indonesia's Gross Domestic Product (GDP) in 2023.

Indonesia also aspires to become a high-income country by 2045, or 100 years since Indonesia's independence. One way is to increase the manufacturing sector's contribution to the GDP to 28 percent.

KOMPAS/ADRYAN YOGA PARAMADWYA

Barricades of workers during an action commemorating Labor Day or May Day in the HI Roundabout area, Jakarta, Wednesday (1/5/2024).

Increased competency

Minister of Manpower Ida Fauziah stated that competence improvement is one of the definite answers to industrial challenges. "We must improve the quality of our human resources. Domestic human resources must be better than those of other countries," said Ida.

She explained that the target is for Indonesia to have the best human resources, at least in Southeast Asia. "Then we can elevate it to the level of Asia and even the world, if we are serious about achieving our dream of Indonesia Emas 2045," said Ida.

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President of the Global Panasonic Workers Union Federation (FSPPG) Djoko Wahyudi, contacted separately, said that productivity concerns the output of the workforce, which also depends heavily on the input. So far, many Indonesian workers are still working in labor-intensive industries and only a few use high technology, so their output is low. It is believed that increasing capacity and investment will make the Indonesian workforce more competitive.

Djoko exemplified that his institution has sent over 300 interns to Japan in recent years, and the results were good. Apparently, Indonesian workers are able to compete in other countries. In addition to improving the welfare of the workers themselves, the 3-year internship (which can be extended for 5 years) increases their capacity and facilitates Japanese investment in the homeland.

Participants prepare themselves by using personal protective equipment before starting practical training in air conditioning maintenance at the Community Refrigeration Technical Training Center of the Panasonic Gobel Workers Union Federation Training Center in Cipayung, East Jakarta, on Wednesday (31/01/2024).

In the midst of a slowdown in the working age of the world's population, including Japan, Indonesian workers have the opportunity to compete with other Southeast Asian countries. Apart from skills and productivity, Indonesian workers, according to Djoko, have advantages in the field of attitude. Good behavior will open up greater opportunities in the labor market.

Therefore, one of the things that the government needs to do is to improve the skills of workers by adjusting the community work training center (BLK) training programs to the needs of the workforce market. This is so that everyone has at least one skill, making them able to compete in the job market and have a decent life.

"Thus, Indonesian workers have an advantage. We should not let the issue of painting walls in Indonesia be taken over by workers from India," said Djoko.

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