Informality of Labour in the Indonesia Construction Industry

The COVID-19 pandemic has led to concerns about the vulnerability of the estimated 70 million informal workers in Indonesia, who are at risk of job losses and wage cuts due to the lack of a social safety net. This study aims to assess the effect of the COVID-19 pandemic on formal and informal workers in the construction industry in the West Java province. Specifically, the objectives are (i) to assess the effect of COVID-19 on workers’ incomes and work hours, and (ii) to evaluate the implementation of health and safety protocols at project sites and identify associated challenges and limitations. A survey conducted in November and December 2020 obtained 261 responses from workers employed by 19 construction companies. Contingency table testing using Chi-square test of independence was employed to analyse the differential impact of COVID-19 on the two groups of workers. The findings indicate that informal workers were not more vulnerable than formal workers, as they were not targeted for wage reductions or benefit cuts during the pandemic. Health and safety protocols were effectively communicated and implemented by contractors, with no noticeable differences in implementation between formal and informal workers. This can be attributed to the industry’s dependence on informal workers to carry out physical construction work, which has resulted in a higher level of job security and welfare compared to informal work in other sectors. The study underscores the essential role of informal workers in the construction industry and the importance of including them in policies and regulations.