Universitas Gadjah Mada
Faculty of Economics and Business

Social security for workers (jamsosnaker) is one of the efforts to protect the community. Unfortunately, the coverage of social security for workers participation is still not universal. Despite being universal in nature, open to all workers, and long-term, especially in the Old Age Security (JHT) and Pension Security (JP) programs, the participation coverage is lacking.

"Unfortunately, the coverage of social security for workers participation is still not universal as it should be," said the Coordinator of the Microeconomics Dashboard (Micdash) FEB UGM, Qisha Quarina, S.E., M.Sc., Ph.D., in a written statement received on Thursday (June 13).

In 2022, active participants from the wage earner group (PPU) only comprised about 39.9% of the total formal workers in Indonesia. Meanwhile, active participants from the non-wage earner group (PBPU) only accounted for around 5.19% of the total informal workers.
“The urgency to expand social security for workers participation can be seen from the structure of the labor market and the demographic transition in Indonesia,” Qisha explained.

Qisha pointed out that the labor market in Indonesia is dominated by informal workers, comprising nearly 60% of the total workforce. The majority of these informal workers are characterized by vulnerabilities such as low education levels and incomes in the fifth decile or lower. On the other hand, Indonesia's demographic transition is moving towards an aging population, with the proportion of older people (aged 60 and above) projected to reach one-fifth of the total population by 2045. Elderly workers are particularly vulnerable, with the majority being informal workers, and currently, only about 1% of elderly workers are protected by the social security for workers program.

Another Micdash researcher, Raniah Salsabila, S.E., mentioned that several alternative policy discussions have emerged regarding the social security for workers program. One such initiative is the contribution assistance recipient program (PBI-Jamsosnaker). However, until this study was conducted, there has been no Government Regulation governing the provision of PBI in the social security for workers program.

Meanwhile, without an adequate jamsosnaker program during productive age, informal workers will become increasingly vulnerable as they enter old age or retirement. The lack of social security coverage for elderly workers will burden the younger generation in the future and for fiscal sustainability in the long run.

"Therefore, efforts are needed to expand social security for workers participation coverage for informal workers, especially in the old age and pension security programs for vulnerable informal workers and the elderly," she concluded.

Source: Micdash
Editor: Kurnia Ekaptiningrum 

Sustainable Development Goals