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The Idea of ​​the World Bank Protecting Workers Who Are Not Pro-Labor

The World Bank or the World Bank proposes that poor and developing countries reduce a number of labor regulations. Among the rules in question are the minimum wage, the severance pay and the power of the employer in recruiting or stopping workers. In other words, the World Bank wants more flexible labor relations or professional relations.

"In many cases, labor regulations, including minimum wages, barriers to hiring and firing decisions, and severance pay, make it too expensive for the workforce to adapt to changes in the workforce. technology ", writes the World Bank in its book World Development Report, 2019.

According to the institution created after the Bretton Woods Conference in 1944, the proposal aimed to prepare poor and developing countries to cope with climate change in the labor industry.

They talk about changes due to technology, often called the "Industrial Revolution 4.0". 

In this revolutionary landscape, the use of artificial intelligence or artificial intelligence and automation has increased, so that human labor is not needed to run the machines in the factory.

The World Bank believes that low-handed labor regulations for employers can be an opportunity for businesses and have a positive impact on the overall employment climate.

"By creating a better business environment, more and more companies are successfully reaching the top." (p.78).

Instead of reducing workers' rights, the World Bank is proposing the so-called "new social contract", which includes investing more in human resources. "Investment in human resources increases opportunities for workers to find better jobs, and such investments increase the employment prospects of newborns or school-aged children."

The World Bank's findings contrast with what they said five years ago in the same report. At that time, the World Bank had stated that labor regulations had little or no impact on the level of work.

Workers will oppose this predictable World Bank proposal. Representatives of the International Trade Union Confederation, Peter Bakvis, said the proposal was a form of decline. Bakvis said the recommendation was not in line with the joint prosperity agenda launched by World Bank President Jim Yong Kim.

Infographic of a robot threatening work


Bakvis argued that the proposal "almost completely ignored workers' rights".

"This vision will free businesses from the burden of social security contributions, provide them with the opportunity to pay as low as they want and pull as they please," Bakvis told The Guardian in Washington DC.

"The unions will also have a reduced role in new provisions to increase the voice of workers," he added.

An unidentified spokesman for the World Bank told the Guardian that the ideas contained in the report could be applied to governments around the world. He hopes that this proposal will generate benefits for workers and all communities.

"To eradicate poverty and increase shared prosperity, we must consider new initiatives to overcome the disruptions that will surely result from various structural changes," he said.

Revised Labor Code


In the Indonesian context, labor rules are regulated by the Employment Act No. 13 of 2003. If this World Bank recommendation is to be implemented, the first thing to do is to revise this law.

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