JAKARTA, KOMPAS — The unemployment rate in Indonesia declined from 11.2 percent in 2005 to 5.3 percent in February 2017. However, the decline has not really improved the job situation in the country.
The unemployment rate among young people remains high at 19.4 percent. The proportion of young people who do not work and are not educated or receive training is also quite high at 23.2 percent. The young people here are those aged between 15 and 24.
Another thing that has happened is that the proportion of workers in vulnerable jobs is still relatively high at 30.6 percent of all workers. The vulnerable work is interpreted as jobs outside the informal sector, occupations that are considered high risk, and casual workers.
Owais Parray, an economist from the International Labor Organization (ILO) Jakarta, said on Thursday that the Indonesian economy had changed a lot since the financial crisis in 1997 and 1998. This has had a great impact on jobs.
The ILO released the Indonesia Employment Report 2017: Taking the Advantages of Technology for Growth and Employment Creation.
Prior to 1997, for example, the rapid growth in Indonesia’s manufacturing sector also resulted in the rapid growth in employment. However, the current pace of job creation in the manufacturing sector is slowing. In 2006-2016, the share of employment in the manufacturing industry only slightly increased to 13.1 percent.
In the period 1996-2006, the number of people with second jobs was relatively small. The proportion was about 9 percent of the total workers. However, by 2016, the proportion of workers with second jobs increased to more than 15 percent.
The ILO report mentions one of the causes of it is the emergence of digital technology that allows more flexible working hours. "Today, the whole world is in an era of a fierce competition. Global investments are flowing everywhere. At the same time, digital technology is growing rapidly and changing the industry landscape, including work," Owais said about the background of the Indonesian Employment Report 2017.
According to Owais, the biggest challenge facing Indonesia in the era of the tight competition is how to improve the quality of workers’ skills. The government needs to understand that the growing digital technology can be used to advance the competence of human resources.
The report recommends that Indonesia should not resist change due to the presence of digital technology. Technology can serve as a catalyst for creating new high-value economic resources. This is in line with the increasingly dynamic labor market condition.
However, the disruption of the digital technology in employment in Indonesia should also be accepted. The impacts, among others, are in the forms of the decline in robot prices or robotic systems for the industry.
With such a problem, said Owais, the Indonesia government should begin to compile and have a data bank on the condition of labor and information on the job market. The data should be updated regularly.
Professor of international economics at the School of Economics and Business, University of Indonesia, Mari Elka Pangestu, said the government must first know the skills needed by the industry. The government should also know about prioritized skills which should be improved.
After that, the government must know and develop its competency standards. Then, the government builds a monitoring system and employment platform. "This should also covert those who work in the informal sector. They must get protection," said Mari.
Vocation
Assistant deputy for commerce, entrepreneurship and employment at the Cabinet Secretariat, Roby Arya Brata , said the government had invited the private sector to be involved in improving the skills of the workforce. They are involved in the revitalization of the vocational training center and the preparation of the vocational education curriculum.
Related to employment, Roby said there will be 25 special economic zones in Indonesia. Each of these economic regions will certainly absorb the new workforce. The government encourages investors who will enter special economic zones to work with local governments in establishing vocational training centers or vocational schools with required subjects.
Assistant deputy for employment at the Economic Coordinating Ministry, Yulius, said the government was finalizing the vocational curriculum, mapping, and projection of jobs required by the industry. The preparation involves the Economic Coordinating Ministry, the Ministry of Education and Culture, as well as the Ministry of Research, Technology and Higher Education.
Meanwhile, the chairman of the employment department at the Indonesian Employers Association (Apindo) Harijanto said that the government should ensure that the direct investment could create job opportunities.
He acknowledged that the government had also involved Apindo and the Chamber of Commerce and Industry (Kadin) to identify the job skills which are needed by the business community in the leading industries.
(MED)
