Wage Labor and Industry Sector Concentration

Wage Labor and Industry Sector Concentration

The results of this brief review is to invite research deeper into the causes of wage differences in the various sectors of the economy either because of differences in skills, education, location (region), gender, experience, and other institutional factors. However, some conclusions can still be drawn. First, there are still signs of wage relevance theory to reality in Indonesia. The problem, perhaps translating what is meant by terms such relevance. In this study the relevance of at least understanding it is to give guidance on what and how to do it, and then see the results. Some evidence suggests that what was raised by Adam Smith over 200 years ago can be found in Indonesia. Bottom layer of workers in general and the less skilled and not from time to time in the real wage rate does not change much even decreased continuously. If at any time be adjusted, this action could strengthen the existing state of imbalance. These symptoms not only in traditional agriculture as a sector, but also present in the industrial sector. Most of the workforce are people who are doing the marathon chasing the horizon, barely moving in terms of purchasing power, and perhaps this is what is referred to as the wage rate may simply live.

Where do the segmentation, as in the case of medium and large industrial sectors, the more clearly seen that the less the labor force may enjoy a relatively high wage levels. But conversely, the more there is competition hard to fight low wages. This situation is exacerbated by the increasing need for quality led to higher labor, use of capital, and technology. This has been foreseen and can be explained by various theories.

The second conclusion, it is the implication that the concentration without offset other forces can be expected to be cumulative and collusive. Nature of the latter is probably more dangerous than the monopoly. It is hoped the government would be able to keep up, but the scope is very broad, for example in matters of wages so it is unlikely the government can control it effectively.

One of the other forces that began to rise is a strong trade union organization and is responsible for wage labor so that inequalities can be reduced while increasing the productivity of desire remains negligible.

The development and deepening of Industrial Structure in Indonesia

Developmental changes in the economic structure of Indonesia during the time studied in this paper is relatively slow, if it views the shift from sector A to sector M and S. Indonesia is still lagging behind the industrialization process of the ASEAN countries, especially with the country of South Korea. This is seen clearly and the share of manufacturing value added to GDP per capital and value added manufacturing sector is still relatively low. However, the economic potential and industrial Indonesia is still widespread, both in terms of resources and the population is unemployed. Large number of people as one of the factors of production, as well as the broad market, but demand is still low effectiveness against a variety of modern industrial goods. Development of domestic industries that drive the high price because it must be thought out carefully in the domestic market relatively quickly saturated. This is not because the economy in a state of depression, but because of low purchasing power. Each item has a market segmentation, even in some cases show a dualistic economic conditions. The divided state of the economy may be exacerbated by the lack of technological aspects to be considered so that the formal sector of the industry is less able to absorb the labor force as expected. The use of capital-intensive technologies in the context of the continuity of the process of industrialization in Indonesia can not be avoided, but taking into account the number of unemployed workers is the use of production technology as far as possible to consider these factors and conditions.

Industrial development during the decade of the 1970s lack of regard that some of the industry should have a relatively high FLR BLR and was low. This is a challenge now and in the process of industrialization in the future. Developing linkages with industry are relatively high, it can not be support levels higher industrial efficiency and support the competitiveness of the commodity market. Strengthening of export re-orientation of the domestic industry to sustain the interests of balance of payments needs, to create added value and employment opportunities and open up new opportunities by not ignoring the difficulties in inviting investors and the market have to compete hard. It can not be avoided, if the commodity to be produced Indonesia has first mastered the advanced countries. Marketing of these items is typically controlled by a company of international oligopoly monopoly and very tough. So, if Indonesia wants to get there, the problem of entry barriers (barrier to entry) can not be avoided. Therefore, the first attempt was to join them. This requires a warranty, not just the economic stimulus alone. All the developing countries today are racing to give it, but a variety of investor appeal may lie beyond it.

Gradually deepening industrial structure has seen Indonesia. However, the visible symptoms are proportionately less employment opportunities, thus shifting the internal structure of the manufacturing industry tend to be more capital intensive. In this case the trade off problem can not be avoided, but the considerations which must not be selected regardless of the objective conditions of Indonesia. Meanwhile, the ongoing process of deepening the industrial structure of Indonesia has been boosting demand for higher import needs in terms of capital goods, raw materials and auxiliary materials.