State-Sponsored Precarious Work in Indonesia

Abstract

This article discusses labor outsourcing as the main form of precarious work in Indonesia. It is argued that demands for labor flexibility and the expansion of precarious work show that the state’s role in protecting workers is being cast aside as Indonesia’s peripheral position in global capitalism sees the state sponsoring a “labor flexibility regime.” Labor outsourcing was legalized in 2003 with the enactment of Labor Law No. 13/2003. That law came from an agreement between the government and the International Monetary Fund. Labor outsourcing is now widespread and has detrimental effects for workers and unions. Labor outsourcing practices have created a new actor in industrial relations: the labor agency. It has also created a highly complicated and difficult labor relations situation, fragmenting workers by work status and bringing harsh confrontations between labor unions and community members. Labor outsourcing practices have also presented tough challenges for the Indonesian labor movement in developing alternative strategies for organizing.