Towards Win-Win : A Labor Reform Strategy to Benefit All
Indonesia needs more jobs. While 2.1 million jobs have been created on average over the past three years, the 20 percent youth unemployment rate, four times higher than the adult unemployment rate, combined with the growth of the country’s labor fo...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/361621624942826086/Indonesia-Jobs-Action-Program-Towards-Win-Win-A-Labor-Reform-Strategy-to-Benefit-All http://hdl.handle.net/10986/35924 |
| Summary: | Indonesia needs more jobs. While 2.1
million jobs have been created on average over the past
three years, the 20 percent youth unemployment rate, four
times higher than the adult unemployment rate, combined with
the growth of the country’s labor force, emphasizes the
importance of greater job creation (Sakernas, 2017).
Indonesia’s productive age population is now growing.
Current changes in the demographic structure will provide
Indonesia with a window of opportunity to achieve a
demographic bonus during 2020-2030. However, to enjoy
optimum benefits, the country’s human resources must able to
meet the requirements of the labor market. Therefore,
mastery of the skills needed by the labor market,
particularly regarding technological and entrepreneurial
skills, is critical. (LD FEUI, 2017). It is important to
continuously improve both the quantity and quality of jobs
created. Employment in Indonesia has been dominated by low
productivity sectors, of which 30 percent is employed in the
agricultural sector (Sakernas, 2017). Output per
agricultural worker is equivalent to only 1/3 of the
processing industry sector and 1/2 of the service sector’s
output. New job creation has generally taken place in such
low productivity sectors, with 65 percent of all new job
creation between 2011-2016 taking place in the agricultural,
trade and low-end service sectors. The current composition
of the labor market has moreover given rise to a division
between formal and informal sectors, between skilled and
unskilled workers, and between contracted and non-contracted
workers. 58 percent of all workers, including employees as
well as freelancers, are not covered by employment
contracts, meaning that they are more vulnerable to shocks
and receive less protection. |
|---|