Waiting for the Labor Story

A skilled, productive and prosperous workforce will support a quality economy.

KOMPAS/FERGANATA INDRA RIATMOKO

Underwear factory workers are getting ready to return to work after using their break time in Banguntapan District, Bantul, DI Yogyakarta on Monday (12/4/2021).

Labor plays an important role in a country's economy. The government needs a role to create a workforce that plays a role in supporting the country's economy.

Their work produces goods and services that support the production process. They also receive compensation, which is then spent to meet their living needs. Some allocate their income to support their family's living needs.

Judging from gross domestic product (GDP) based on expenditure, these workers have a role in household consumption and may play a role in the export of goods produced. Its role may be small in terms of value. However, if carried out on a large scale and continuously, it will have a significant impact on economic growth.

Therefore, the slow increase in the number of people of productive age, namely 15-64 years, could affect the economy. Moreover, the number of older age groups who are no longer at the peak of productivity is increasing. The hampered supply of productive labor can affect the employment structure. Production in this age group is decreasing as the population shrinks.

The hampered supply of productive labor can affect the employment structure

In several countries, opportunities for senior citizens to work are available despite various considerations, such as shorter working hours and lower productivity. In addition, their income is not as high as that of younger workers. Their role in the economy also diminishes.

Also read: Global Growth of the Working Age Population Has Slowed

On the other hand, the World Employment and Social Outlook Trends 2024, released by the International Labour Organization (ILO), portrays the condition of employment that has not yet recovered after the Covid-19 pandemic. The number of unemployed people in the world is estimated to increase by 2 million people in 2024, to 190.8 million people.

As the economic condition continues to recover, the number of unemployed is predicted to decrease. Then, like a circle, workers who obtain jobs and receive salaries will spend their money. Living decently and even better, becoming prosperous. They also support the country's GDP through household consumption.

One of the issues in Indonesia's employment sector is the level of education of its workforce. Although the percentage is decreasing, more than a third of the population works with only a primary school education or lower. The percentage of the population with only a primary school education working, which was at 37.69% in August 2021, increased to 38.8% in August 2022 and then decreased to 36.82% in August 2023.

In fact, the level of education is related to the quality and productivity of the workforce. Moreover, the shift from labor-intensive investment to capital-intensive investment and the increasing role of technology in industry demands an increasingly qualified workforce. Here, the role of government is awaited.