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Reducing Unemployment in Indonesia - by khaliza Meutia (2013)

Updated: Jan 12, 2021


Reducing unemployment in Indonesia is a controversial subject, not only because there are many different moral dilemmas associated with it, but also its constitution and the definition of its unemployment. At the extreme ends of stress because many of them lost their job opportunity and get stress because does not know how to deal with it, advocates say that unemployment also the commit of suicide or the method of death because the handle their life without any employment. At the other end are opponents of unemployment in Indonesia is who may consider this method as a form of evils and suicide cases. Thus, based on the Wikipedia, unemployment in Indonesia is the challenge for those who still fight to get a job in order to have a better employee for the future.

Problem definition

Nowadays, the majority in Indonesia is still stand as an unemployment person, even though many of them are graduated from the University and so on. This is very complex and difficult issues to comprehend because how we look at the graduated students are still unemployed in some places in Indonesia. Although people are open minded to open job opportunity when they are really need people to get the job and will not be vain for those who are in high education level.

Most of the unemployed are young, high education, inexperienced, and still live with their parents as the best path to reduce unemployment is the services sector since absorbs most of the highly educated workers. The agriculture still dominates employment in rural areas. In urban areas most workers are in the services sector, although there is sizable and expanding share of the low educated who are engaged in agriculture. Industry is the second highest employer in urban areas but plays a minimal role in rural areas, not every sector has the same growth elasticity of employment for the highest employment generating sector is services while agriculture is still the champion to increase rural employment.

By having all the recommend that the government in its quest to reduce unemployment should ensure that urban services and rural agriculture enjoy unfettered long term period growth. Providing any other types of the job, especially those with below market wages or focusing on the wrong sector in location would not be effective in reducing unemployment.

Open unemployment is a problematic issues to deal with developing countries. Given the unavailability of a comprehensive and reliable social security system, there is a very high incentive to stay employed, especially among the poor.

Meanwhile, the poor who are not working, and certain extent the non-poor who are low educated and unemployed, tend to become discourage workers. These are the people who are out of work but not looking for work because they believe they cannot find one (kingdom & knight 2006). As the outset, the condition above implies that those who fall into the traditional definition of openly unemployed people who have no worked but actively looking for one in developing countries do not necessarily come from poor families since they can afford to wait for a job opportunity that fulfil their expectations. Furthermore, it is also possible that they are relatively highly educated, thus who have high wage reservations and prefer to wait for the high paying job.

In the effort to reduce unemployment it is important to ensure the types of the job created in an economy match the skills and expectations of the unemployed. As an example, an employment creation program that provides below market wages would not be successful in reducing unemployment in a country whose unemployed exhibit the characteristics described in the preceding paragraph.

In contrast, the program would attract those who are already working in the informal sector to switch jobs or the discouraged workers to enter the labour market. Meanwhile, it may be successful in increasing general welfare the program would not reduce the unemployment rate. Based on this research paper, we investigate whether growth in different sectors in an economy indeed has different elasticity of employment. As we develop a model that improves the widely used one and apply it by using survey datasets from Indonesia.

The economy in Indonesia has been divided into three sectors, which are: agriculture, industry, and services; there are two locations in this economy urban and rural.

Therefore, in total it has six sectorial growth numbers as we already divided. Then, the employment figures into total, urban, and rural because there may be different of the sectorial location impact in to two areas. The government of Indonesia has the ambition to reduce Indonesia’s unemployment which rate to about 5.7 percent in this coming 2014. This ambition was mentioned by the minister of National Development Planning named was Armida Alisjahbana. According to the latest data released the country unemployment rate currently stands at 5.92 percent by using the statistics of Indonesia. The unemployment target of 6 percent that was set in Indonesia to be reached in 2014, which stressed the minister has already been achieved.

As many unemployment still waiting for the job opportunity in Indonesia, most of them are decided to have job abroad because some people may think that by working abroad it would be easy for them to find much money and easy to get a better job. Although working abroad is seen as very risky but it is still popular among the unemployed workers even they only have a lower education. The low education attainment is not a problem for them since they will be trained at the training camps before their employment.

Most of the lowers education are more highly motivated to work abroad, because it is difficult for them to get a better job in their own country as others are from high education. Therefore, they are more ready to take high risks any kind of manipulation such as document falsification or illegal placement. Besides that, working abroad it seems are more advantages than working in the local informal sector or agriculture sector. However, by realising manpower export, the Indonesian government has tried several policies to improve the protection of migrant workers to simplify the placement procedures.

During 2004/2005, Indonesian workers had to pass 40 administration officers in order to apply for working permit overseas. Since march 2005, the Indonesian government has created the so called One Roof System which united several department into one agency for providing permission to work abroad, so it easier for the low education to get a better job abroad. To stop crime in recruitments or placement processes, the ministry manpower has established several control points during the recruitment process until the return of the migrant worker home. Yet in many cases the actual practice differ from the regulation.

While most people in Indonesia are still stand as an unemployment, and many of them are low education. However, the highest education may think that, people who have low education cannot have a good job with a good salary as a highest education do, but somehow there are also still some of unemployment who have graduated from high education and many of them are still young. Low education it does not mean they have no skills and cannot have a better job, low education it might not be because they are stupid or low skills, but it might be because many of them come from poor family and they cannot afford for they fee to continue their education, so that, they still have skills and chances to get a better job and high salary even though they have to work abroad.

Argument 1

Everyone has the right to get a better job with high salary

In cases, where there are no dependants who might afford for the unemployment even their own family, the right of the lower to choose should be paramount. While the highest education with a good job by having highest salary they can do everything without thinking about others who cannot even have a better job. I disagree with this. Many people think each person has the right to control his or her employee and should be able to determine at any places, in what way, good or not good the job will be provide for them. Besides that, human being should care each other so that all people will be employed and has a necessary job as their skills belong to. In another way, people must create ideas for those who have lower education but they have skills so those people who are good and not good in their skills should be employee at the right places, so that, no one has the right to go and working abroad while there are many jobs have been created in their own country which is Indonesia.

Furthermore, whatever rights we have are limited by our obligation. The decision to work by having a better job are with those people decisions, whether they want to go abroad to work as well as having experiences or work in their own country as already been provided with a good job and good salary.

Argument 2

Working abroad can end people’s suffering as a poor quickly and safety.

Working abroad is a better choice for those who have low education so that they can get a better job and high salary. Many people of low education they prefer to work abroad as TKI to have a good salary, some of them they do not even think about living their family behind as long as they can find much money even though they have to work oversea. Faced with the biggest risks, tiring and all the useless existence it will not be hindrance for them to go oversea. The lowest education also has skills that should be able to get a good job and to overcome their skills. As they cannot find in their own country so that they go and overcome their skills abroad. For this reason, it might be accepted and I think working abroad is the best way for them to end their suffering of living in poor family. Keeping them in their own country with useless like no job for them to overcome their skills is like torturing them in their own country. Thus, it would be much better for them to go and work abroad.

Argument 3

Keeping people who are in low education in their own country with no money, is better for them to work abroad and find much money.

It is always have way to end suffer of poor in any places. To legalize low education and useless in their own country is better people working abroad. Where unemployed has been legalizes for example like there are many Indonesian who are working in Malaysia should be legalized as in Indonesia still many lower education who cannot work in a better job. By legalizing those people who are better to work abroad it will decrease the crime that happen nowadays. At the same time, job will be provided for those who have no job in Indonesia and can have a better job abroad. Allowing such people to commit working abroad would not only let them to have what they want, but it is also would free valuable resources to treat those who are in lower education but still can get a better job abroad. As in Indonesia there are still many unemployment walking around.


Unemployment may not because they have no skills but because there is no job provided for them as many of them are from low education and young. Without having high education, all people still have their own right to get a better job as they have some skills should be useful in any places as long as they can face the risky, it does not mean they cannot even work and have high salary. In my personal opinion, we do not have right to let the low education living in the poor as they also have skills and have talent to work at a good places and high salary. For instant, when people are really want to work but they have no courageous to show their skills we should be aware and take those people to be employed in their own skills. By helping those unemployment it will not be suffered a financial loss of our skills, but it shows that we care of them and love our own country, not to let them living in poor with suffering but they have the rights to be employed as well.

Use those people who are in low education and have high skills to work in our own country is much better than letting them working abroad living the family behind and take big risky abroad.


1. Copyright. (2011). Antara news. Retrieved December 9, 2013 from:

2. Global database team. (2012). Ceic data blog. Retrieved from 9, December, 2013 from:

3. Copyright. (2009). Indonesia business links. Retrieved December 12, from:

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