Since last year, there’s been a book that i’ve kept close, a kind of pocket companion that i’m still reading, it’s call: Surplus Pekerja di Kapitalisme Pinggiran by Muchtar Habibi
One of the key insights I’ve gained from this book, its nuanced analysis of how post-crisis economic restructuring in Indonesia has contributed to the systematic production of a surplus labor population. One of the primary hindsight and gave me sudden sense of clarity and realization was, after the 1997 financial crisis, the Indonesian government begin adopting labor flexibility policies. These included promoting contract work, outsourcing, and informal employment in order to reduce unemployment. However, rather than resolving joblessness through industrial growth, this restructuring has led to increasingly unstable forms of employment
What Habibi mentioned is that this instability isn’t just temporary or the result of individual experience. It’s structurally rooted in the economic and political systems themselves which unfortunately, created by Indonesian government. All these things lead to the institutions produces and maintains unstable, low-quality, and instability work and life for a large portion of the population
By all means, the structural instability can be interpreted in several ways:
- labor market policies in Indonesia often promote contract-based and outsourced work, making labor “flexible” for employers. But for workers, this called “flexibility” translates into job insecurity, lack of benefits, and vulnerability. Since 20231, the informal job market has grown significantly specifically in Yogyakarta region, now increased up-to 53.38% of total employment
- with limited and competitive formal job opportunities, many people are pushed into the informal sector, where they receive no legal protection, no health insurance, and no stable income. as we can see this daily life around us such as the rise of gig workers, street vendors, and ride-hailing drivers like Gojek/Grab
- even well-educated individuals struggle to find secure formal employment2. This points led to a deeper systemic failure: a mismatch between educational outcomes and the economy’s capacity to absorb its labor force, resulting in a surplus of labor with no clear direction
In short, Habibi’s analysis reveals how instability is no longer an exception, but rather an expected and normalized condition of life under “ephemeral” capitalism. The structural nature of this instability introduces us to rethink how we understand labor, development, and social stability not as matters of individual failure, but of institutional design
Footnotes
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According to Indonesia’s National Labor Force Survey, the jobs that were created around 18 million jobs between 2018 and 2024. On the paper, this story seems to be impressive, but it’s not. More than 80 % of the jobs created were in household enterprises, while the remaining jobs come from corporations, large-scale industries and government-related jobs. Not only that, they are deeply informal and poorly paid. In 2023, up-to 59 % of Indonesia’s workers were employed informally without any formal employment protection and below minimum wage ↩
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Data were obtained from Indonesia’s National Labor Force Survey, which is the most recent survey from 2024, stated that almost 16% of working force were unemployed in Indonesia were graduates with a bachelor’s degree or higher. Indicating that there were horizontally mistmatched workers, such as skills don’t align with the job requirements, education exceeds the job requirements, and workers themselves are overeducated but also horizontally mistmatched. While the government press says that workers need to upskill themselves to match the demands of the labor market, still, one of the primary considerations is the government needs structural transformation to address the labour force. ↩