May Day, an Opportunity to Boost Productivity
Every 1 May, the commemoration of International Workers’ Day resonates once again. The long history since the Haymarket Affair tragedy in Chicago serves as a reminder that workers’ rights were born from hard struggles. From there, the world came to know modern work standards: humane working hours, labour protection, and the idea of decent welfare.
However, more than a century later, the challenges of the working world have changed. If in the past the struggle focused on ending exploitation, now the issue has shifted: how to create a balance between welfare and productivity in an increasingly competitive and pressured economy.
In Indonesia, May Day often becomes a stage for demands for wage and allowance increases. These aspirations are legitimate. But there is one aspect that is often overlooked: labour productivity. In economic logic, sustainable wage increases are only possible if the added value produced by workers also increases. Without that, wage increases risk becoming a burden that erodes company competitiveness.
This issue becomes even more complex when looking at the dynamics of Provincial Minimum Wage (UMP) setting over the last two decades. Annual UMP increases often do not fully reflect productivity improvements, but are also influenced by non-economic considerations, including local political dynamics. In many cases, UMP increase policies become populist instruments related to efforts to boost regional heads’ popularity.
For companies, especially in labour-intensive sectors, this pattern of increases that do not always align with productivity creates layered pressures. Labour costs rise, while efficiency and output do not always move at the same speed. In the long term, this condition can hold back business expansion and even encourage investment relocation to more competitive regions or countries.
It is in this context that it is important to refocus on the most fundamental thing: worker productivity. Productivity is not just a statistical figure, but a reflection of skills, discipline, technology use, and work culture. When productivity increases, space for wage increases will open up naturally and sustainably.
The Investortrust perspective places workers and employers as two inseparable pillars. Companies can only grow if productivity increases. And workers can only prosper if companies are in a healthy condition. This relationship is not a conflict, but a strategic partnership.
Indonesia is currently pursuing higher economic growth. This ambitious target can only be achieved if the formal sector develops strongly—where companies grow, investments enter, and jobs are created. However, the formal sector is very sensitive to costs and business certainty. If pressures increase without being balanced by productivity, competitiveness will weaken.
Policies such as the Job Creation Law are present to try to balance investment needs and labour protection. However, no matter how good the regulations are, the real key still lies in healthy bipartite relations at the company level.
May Day 2026 should become a momentum to shift the paradigm. From mere demands to joint reflection. From a focus on distribution to value creation. Workers need to continue improving skills and productivity. Employers need to ensure a fair and humane work environment.
Amid the current business pressures—which are not light, both globally and domestically—stability becomes a primary need. Therefore, May Day celebrations are hoped to take place peacefully and constructively. A conducive atmosphere for the business world is not only the interest of entrepreneurs, but also the interest of workers themselves. Without stability, investments are held back. Without investment, jobs are hard to add.
In the end, welfare cannot be built only from demands, but from the ability to create greater value. If productivity increases, wage increases will follow. If productivity lags, welfare will always be delayed.