These informal workers play a crucial role in supporting both the local and national economies, yet their contributions are often overlooked.
Statistics Indonesia (BPS) recorded that the number of informal workers in Indonesia as of February 2025 stood at 86.58 million, accounting for 59.40 percent of the country’s workforce.
Beyond the numbers, this data reveals that over half of Indonesia’s workers are in a vulnerable position due to the lack of protection compared to formal sector employees.
In Indonesia, the large number of people working in the informal sector is inseparable from the structure of the economy, which is dominated by micro, small, and medium enterprises (MSMEs).
Indeed, the prevalence of informal workers is not unique to Indonesia but is also seen in other countries.
Manpower Minister Yassierli stated that several countries, including India, face similar challenges, with informal workers comprising around 60 to 70 percent of their workforce.
What are the key reasons underlying the predominance of informal workers in Indonesia’s employment sector?
Several factors influence people’s decisions to work in the informal sector. With technological advancements and the rise of the gig economy, flexible income opportunities have become an inevitable choice.
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However, this comes alongside harsh realities: the wave of layoffs in various industrial sectors, such as manufacturing, and the challenges of finding decent formal employment in Indonesia, even for university graduates.
Rather than waiting indefinitely for an interview opportunity that may never come, many people opt to become online motorcycle taxi drivers or start home businesses—solutions that may be temporary or permanent.
It is important to underline that the large number of informal workers poses complex challenges.
These workers often lack stable incomes, retirement benefits, and legal protection.
This systemic inequality calls for immediate actions, such as equal access to education, government support for job creation, and appropriate protective measures.
Timboel Siregar, advocacy coordinator at state workers’ insurance provider BPJS Ketenagakerjaan, assessed that the “formalization of the informal sector” can be realized through supportive regulations.
For instance, regulations for online motorcycle taxi drivers could cover issues related to working hours, work accident insurance, and incentives.
Meanwhile, Tadjuddin Noer Effendi, a labor observer from Gadjah Mada University (UGM), stated that legal protection is needed to establish an occupational safety and health (OSH) culture for informal workers and those in flexible jobs, which are expected to grow further in the future.
Furthermore, it is crucial for the government to commit to encouraging labor absorption along with strategic investments that are coming into the country.
It is because, in essence, national strategic projects can only run optimally with the support of qualified, relevant, and competitive human resources.
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Though Indonesia still has much work to do, the government has taken several measures to address this issue.
The Ministry of Manpower is seeking to boost vocational and entrepreneurship training programs, as well as expand access to social security for informal workers.
These efforts aim to better prepare informal workers in case they transition to the formal sector.
Furthermore, BPJS Ketenagakerjaan is open to informal workers or those categorized as non-wage earners, such as farmers, fishers, street vendors, and other self-employed workers.
Informal workers can also register as BPJS Ketenagakerjaan program participants by paying monthly contributions and then receive social security coverage. This service is also starting to be integrated with related platforms, such as those operated by ride-hailing companies for their drivers.
By enrolling in the insurance program, workers in the informal sector can gain greater peace of mind in carrying out their work, as they are guaranteed protection in the event of unforeseen work-related risks or financial problems.
BPJS Ketenagakerjaan targets protecting 57 million workers, both formal and informal, through its insurance program by 2025.
These measures and collaboration across sectors and agencies must also be supported continuously to ensure sustainable implementation and foster a more inclusive employment and economic environment in Indonesia in the future.
Though often underestimated, informal workers ultimately play a key role in supporting Indonesia’s economy.
To this end, recognizing the role of informal workers through the provision of maximum support and protection will enable Indonesia to build a stronger economy and sustain growth amid global uncertainties.
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Translator: Arnidhya Nur, Raka Adji
Editor: Rahmad Nasution
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