Selasa 07 Nov 2023 07:00 WIB

Indoensia Unemployment Rate Still Worrying

State-owned enterprises are expected to continue to play a role in addressing the unemployment problem.

Rep: Rahayu Subekti/ Red: Fitriyan Zamzami
Applicants queue before entering the Jakarta Job Fair area at the Cililitan Wholesale Center (PGC), Jakarta, Wednesday (19/9/2023).
Foto: Republika/Thoudy Badai
Applicants queue before entering the Jakarta Job Fair area at the Cililitan Wholesale Center (PGC), Jakarta, Wednesday (19/9/2023).

JAKARTA -- The unemployment rate as of August 2023 has decreased according to the latest data from the Central Statistical Agency (BPS). Despite the decline, unemployment figures in the country are still considered to be worth to be warry about.

The Central Bureau of Statistics (BPS) noted that unemployment in Indonesia reached 7.86 million people as of August 2023 or equivalent to the open unemployment rate (TPT) of 5.32 percent of the total 147.71 million labor force.

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The number of unemployed was 0.54 percent lower than in August 2022 which reached 8.42 million people. Although it continues to decline, the number and unemployment rate is still relatively higher compared to August 2019 or before the pandemic, which is 7.1 million people.

“In numbers, it is necessary to continue to be vigilant because most companies that have risen from the pandemic have prioritized recruiting those who were laid off during the pandemic rather than making new recruits. That's the challenge,” said Bhima Yudhistira, Director of the Center of Economics and Law Studies (Celios) on Monday (6/11/2023).

According to Bhima, state-owned enterprises (SOEs) are expected to continue to play a role in addressing the unemployment problem in Indonesia, by being more active in creating job opportunities while waiting for a full recovery from the private sector. Then, Bhima continued, one of the crucial steps is to increase labor supply by ensuring a match between expertise and market needs.

Data Ketenagakerjaan BPS per Agustus 2023. - (BPS)

“Yes, of course in terms of labor supply must be pushed forward, yes. The conformity between expertise, vocational school graduates, SMK, it's with the labor market,” Bhima said.

Furthermore, the emphasis on labor-intensive investment is also key. This is so that the investments created can be better qualified by absorbing local labor.

“Of course, it is to encourage continued industrialization so that the manufacturing industry sector can provide more new jobs,” Bhima said.

Bhima added that efforts to spur growth in the manufacturing industry sector are expected to create more new jobs. The efforts are also in line with strategic measures to foster sustainable economic growth.

Focusing on such measures, it is expected to open up new opportunities in terms of jobs as well as foster more inclusive and competitive economic growth.

Data Jam Kerja per Agustus 2023. - (BPS)

Acting Head of BPS Amalia Adininggar Widyasanti in her presentation on Monday (6/11/2023) said that in August 2023 there were 7.86 million unemployed people or equivalent to 5.32 percent of the total labor force in the period.

Amalia said the figure was 0.54 percent lower or down by 0.56 million people compared to the same period in 2022. “But, this unemployment rate is still relatively higher than before the Covid-19 pandemic,” Amalia said.

Amalia explained that there were 212.59 million working-age residents in August 2023. Of this total, 147.71 million of them are in the labor force. “Thus, the labor force participation rate (TPAK) reached 69.48 percent,” Amalia said.

He revealed that the proportion of formal workers is experiencing an increase driven by the growing proportion of the population. Especially residents who work as laborers or employees or clerks.

“Meanwhile, the proportion of full workers has also increased although it is still lower than before the pandemic,” Amalia said.

BPS noted that the three business fields with the largest number of workers are agriculture, commerce, and processing industries. Meanwhile, the most labor-absorbing fields of business are accommodation and food, construction, and agriculture.

Regarding the increase in formal workers, Amalia explains, it occurs due to the increase in workers with the status of laborers, employees, and employees. 

Based on BPS data, formal workers in August 2019 reached 44.12 percent, in August 2020 they reached 39.53 percent, and in August 2021 reached 40.55 percent. Meanwhile, in August 2022, the share of formal workers reached 40.69 percent and in August 2023 it reached 40.89 percent.

“A total of 57.18 million people work in formal activities, which is up 0.20 percentage points compared to August 2022,” Amalia said.

BPS also noted that the areas of business that experienced the greatest increase were the provision of accommodation and the provision of food and drink. The business field group increased by 1.18 million people.

Meanwhile, BPS also recorded the number of commuting workers in August 2023 at 7.38 million people. Amalia said that the figure decreased by 0.69 million people from August 2022.

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