13 Main Causes of Unemployment in Indonesia

Central Bureau of Statistics (BPS) recorded the number of labor force in Indonesia as of August 2017 of 128 million with the number of unemployed reached 7.03 million people. The number is sometimes getting lower or higher depends on the condition toward the growth economy of Indonesia.

Most of unemployment is caused by an imbalance between employment and people in need of work, so few get the chance to work. Moreover, there would be the lists of causes of unemployment in Indonesia. You need to see these following paragraphs.

  1. Imbalance between employment and the amount of labor

The number of workers increased day by day. Even Undergraduates and master graduates are getting harder to have a job because of the small number of jobs available. The need of the fit vacancy grows faster than the vacancy that available.

The explosion of the population in Indonesia is not accompanied by the development of jobs which causes more and more unemployed young graduates to wait for work. So the number of unemployment was increased along with the increase in population. Read more about Interesting Facts about Child Labor in Indonesia

  1. Technology advances

The development of technology should be a pride because with the more advanced technology, human work will be easier. However, the development of technology also makes many companies require only a few workers because of its position has been replaced with the presence of the latest technology like robots.

The main reasons for companies use robots rather than humans because the cost is cheaper with fast and accurate work. There have been many companies move on using robots and leave the human power.

  1. Applicant skills don’t meet the criteria

A company that has a job vacancy will require an employee who fits with the criteria according to the position that will be occupied by the prospective employee. But it becomes an obstacle when a company needs several employees with high skills.

Automatically, there would just a few applicants who have a chance. This is due to the rarely applicants who have a lot of skills to support the position in a company.

  1. The lack of education and skills

The next factor that causes unemployment in Indonesia is the skill and education problem. Lack of education causes a person to be very difficult to absorb as a workforce. People who do not have a high education usually only end up as manual laborers. Read more about Admirable Moral Education in Indonesia

If abusive work does not exist and does not have the soul of an entrepreneur, then a person can become a permanent unemployed. Moreover, the people who don’t get enough money to reach the education are not willing to level up their skill such as driving, cooking, or farming.

  1. Poverty

Research shows that most of unemployed derived from the people who live under poverty. Although the rate of poverty in Indonesia could be decreased step by step, the number of unemployment could be categorized high. Read more about Types of Poverty in Indonesia

Most people that are grown in the poor families will generally be poor also. It is because they don’t have the opportunity to get an education, or do not have enough supplies to wander. Finally, the thing they will do is unemployed. Poverty is one of the main causes of unemployment in Indonesia.

  1. Layoffs

One of most scary things by private employees is the layoffs or termination toward employment. The layoff would occur due to the end of the working contract or the reduction employees. A company will even do this method to stabilize the working system.

Layoffs become one of the causes of unemployment because usually people who have been laid off will lose employment and difficult to find a new workplace.

  1. The domicile is away from a lot of job openings

Less developed areas will usually be a hotbed for many unemployed. People in remote areas usually have a desire for great success. However, what is the power if their domicile is far from the hometown and do not get the same blessing and chance to try their fortune on the overseas lands. Read more about Unusual Jobs in Indonesia Can Amaze You.

Finally, people like this will end up being unemployed because they choose family, wife, and children as the priority.

  1. The global market

In the era of free global markets and global trade, then unemployment will be the most of big problem ever. There would be a lot of foreign companies established, but they tend to include some workers from their countries rather than using genuine labor.

Moreover, they have their own reason that most of Indonesian skills and ability don’t meet their requirement. Read more about  Effects of High Inflation in Indonesia

Finally, the local people end as the unemployed. It should be a duty for government to make a good policy toward the foreign company. They should limit the foreigners who become the workers in Indonesia.

  1. The difficulty to meet the jobseeker and the vacancy

The vacancy that available sometimes is not announced well. Some potential people who fill the vacancy sometimes lost the information about the vacancy itself. Some companies sometimes don’t spread the vacancy that they need well. Actually there are a lot of job seekers that still need a job and ready to be employed anytime.

The jobseekers sometimes are not active enough in getting information about the vacancy. They have to join job fair or vacancy expo to find a job.

  1. Too high expectation for the prospective workers

It has been general that most of companies in Indonesia expect the high skilled labor. Through the tight selection, sometimes they don’t choose anyone. The main reason is because they have not found the fit person who can work in some certain position. It happen when the company don’t want to employ unskilled person and they don’t need to give a long training after they get the employee. Read more about The Savage History of Slavery in Indonesia

  1. The bad level of EQ and human resources

The level of EQ includes the ability of a person to control emotions, which affect speech / communication skills, socializing, confidence, and other supporting traits in life in society.

People who are good at communicating and good at socializing more easily get a job on the appeal of people who are always quiet and do not dare explore the potential of yourself. Moreover, most of people in Indonesia should have good character and human resource to get the job that they need.

  1. The lack of entrepreneurship skill

Most of people in Indonesia don’t have enough entrepreneur skill to build a business. They have the wrong mindset that they must get a job after graduate without thinking they have to create a job after graduate. So the competition to find a job is greater than making a business. Even though, Indonesia is very potential country to build a business. They couldn’t see this potential chance to become entrepreneur.

  1. The high rate female laborers

The number of working women in 2014 was about 39.2 million. This number is increasing every year. This increase in the number of female workers resulted in competition for job seekers between women and men. However, in the capitalist system, for cost efficiency is usually preferred women because they are easy to manage and not much demand, including in the issue of salary. This condition resulted in a lot of unemployment on the part of men.

Those are the cause of unemployment in Indonesia. Basically, unemployment could be solved well if both of the government support and the citizens could work together. However it would not be as easy as it seems. To eradicate the unemployment in Indonesia would need a long term and process.