Quality of Employment versus Job Availability and the Reality of Unemployment in Indonesia
Author: Usman Arifin M, SH, MH
Abstract
Unemployment in Indonesia is a multidimensional phenomenon, caused not only by the limited availability of jobs but also by the low quality of employment opportunities. This article examines the disparity between decent employment and the reality of Indonesia's labor market from the perspective of labor law. Through a normative-juridical approach and qualitative descriptive analysis, the study highlights how legal instruments such as Law No. 13 of 2003 on Manpower and Law No. 11 of 2020 on Job Creation attempt to address these challenges, yet face structural barriers in implementation. The key findings reveal that the availability of jobs has not aligned with the principle of decent work as mandated by the International Labour Organization (ILO). The study recommends stronger enforcement of labor law, improvements in vocational education, and reinforcement of labor-intensive and sustainable industrial development policies.
Keywords: labor, decent work, unemployment, labor law, job quality
Introduction
Unemployment in Indonesia is a recurring and persistent issue. Each year, the number of new labor market entrants rises significantly, while job absorption remains limited. Moreover, the quality of available jobs is often far from decent. Many workers are trapped in the informal sector without social protection and with minimal welfare.
From the perspective of labor law, the primary objective of legislation is to provide protection, legal certainty, and welfare for workers. However, in practice, there exists a dilemma between the demands of investment and the protection of workers' rights. This creates tension between the availability of jobs and the quality of jobs, which in turn contributes to high unemployment rates and the prevalence of the working poor.
Labor issues are crucial in Indonesia's national development agenda. Workers are not only considered factors of production in economic activity but also legal subjects with constitutional rights to employment and a decent livelihood, as mandated by Article 27(2) of the 1945 Constitution. Consequently, labor policy must not stop at merely creating job opportunities but must also ensure that such jobs meet standards of decency, safety, and social protection.
Yet, the reality on the ground reveals a gap between ideal legal norms and existing labor practices. Statistics Indonesia (BPS) reported that Indonesia's open unemployment rate in 2023 stood at around 5.45% of the total labor force. Furthermore, more than 59% of workers are employed in the informal sector, typically characterized by the absence of employment contracts, unstable wages, and lack of social protection. This indicates that while jobs exist, they cannot yet be classified as decent work.
Another phenomenon is the high rate of unemployment among educated individuals. Ironically, university graduates contribute disproportionately to unemployment compared to those with lower levels of education. This reflects a mismatch between graduates' competencies and the actual demands of the labor market, forcing many highly educated workers to accept jobs outside their field of expertise or below acceptable standards of decency.
Legally, Indonesia already has a relatively comprehensive framework. Law No. 13 of 2003 on Manpower, despite amendments through Law No. 11 of 2020 on Job Creation, reaffirms workers' rights to minimum wages, social security, and occupational safety and health. In addition, Indonesia has ratified key ILO conventions, such as Convention No. 122 on Employment Policy and Convention No. 111 on Discrimination in Employment and Occupation. Thus, the state's normative commitment to ensuring workers' rights is not in question.
