CHALLENGES OF UNEMPLOYMENT IN INDONESIA: TRENDS, ISSUES AND POLICIES
ABSTRACT: A rapid decline
oflndonesia 's economy during the crisis of 1997-1998, has widely affected the
quality of people life, including the declining labour demand, massive
lay-offs, and shrinking formal employment. This situation will continue
confirming Indonesia as a labour surplus country, due to limited productive
working opportunities can be created by slower economic growth against the
growing of new entrance in the labour market. This paper which is based on the
secondary data mainly SAKERNAS data (1996-2004) from BPS Statistics Indonesia,
describes issues and challenges of unemployment in Indonesia, with focus on the
illustration of the unemployment trends, some issues on unemployment and
related aspects, and how the development policies address the challenges of
unemployment. The official open unemployment rate has been slowly increasing,
even during the economic boom ( 1995-1996), and continues rising up to about I
0% in 2004. The incidence of open unemployment has been more pronounced among
women, more educated, and in the urban areas. Other issues concerning
unemployment deal with particularly vulnerable groups such as women, youth and
migrant workers. Underemployment is more serious concern which is indicated as
underutilizing people's potential, and the main factor of working poor. Almost
half of Indonesia's labour force has involved in low productive works, either
with low work hours or low income. Indonesia has faced big challenges to find
way out in reducing the unemployment rate as well as poverty. The employment
policy should focus on creating more full productive jobs and priorities the
policy and protection for the more vulnerable groups.
Penulis: Laila Nagib, NFN
Ngadi
Kode Jurnal: jpsosiologidd080062
