Quality of Employment Versus Job Availability and the Reality of Unemployment in Indonesia

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.

The dilemma arises when such regulations confront demands for labor market flexibility in the context of global economic competition. Investment is viewed as the main driver of job creation, yet investment requirements often demand labor flexibility that weakens worker protections. This tension is most apparent in the controversy surrounding the Job Creation Law, which many critics argue represents excessive deregulation at the expense of labor rights for the sake of economic efficiency.

Accordingly, the main employment challenge in Indonesia is not merely the quantity of jobs available but the quality of those jobs. Job creation without ensuring decent standards will only increase the number of working poor and exacerbate socio-economic insecurity. Therefore, it is vital to examine how labor law can function as an instrument to balance job creation with the protection of workers' rights. This article analyzes the gap between job quality and job availability in Indonesia through a normative-juridical and sociological perspective. The analysis aims to provide academic contributions to labor law development while offering policy recommendations for sustainable and equitable employment policies.

Literature Review

1. Labor Law Theory
   Labor law essentially regulates industrial relations between workers and employers, with the state serving as supervisor and regulator. According to Asyhadie (2016), labor law must ensure the attainment of social justice for both workers and employers.

2. The Concept of Decent Work
   The ILO introduced the Decent Work agenda as a global standard to ensure that every individual has access to productive, dignified, and legally protected work. Decent work comprises four pillars:

   • Rights at work

   • Opportunities for productive employment

   • Social protection

   • Social dialogue

3. National Regulations
   Indonesia has adopted decent work principles through:

• Law No. 13 of 2003 on Manpower, governing employment relations, wages, social security, and occupational safety and health.

• Law No. 11 of 2020 on Job Creation, aimed at accelerating job creation through regulatory reform.

• Implementing regulations concerning social security (BPJS Employment and BPJS Health).

1. Previous Studies
   BPS (2022) reported that approximately 59% of Indonesia's workforce is employed in the informal sector. Meanwhile, ILO (2021) highlighted the high prevalence of working poor in Indonesia, referring to workers unable to escape poverty despite being employed.

Methodology

This study employs a normative-juridical approach with qualitative descriptive analysis. Secondary data include:

1. Primary legal materials: Law No. 13 of 2003, Law No. 11 of 2020, derivative regulations, and ratified ILO conventions.

2. Secondary legal materials: academic literature, journal articles, and reports by BPS and the ILO.

3. Tertiary legal materials: legal dictionaries and labor law encyclopedias.

Analysis was conducted by comparing positive legal norms with the realities of the labor market.

Discussion

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Conclusion

Unemployment in Indonesia concerns not only job availability but also job quality. Inadequate employment worsens social and economic uncertainty. Although Indonesia's labor law framework establishes worker protection principles, implementation faces significant obstacles. Therefore, employment development strategies must balance job creation with improving job quality in line with ILO's decent work agenda.

The study concludes:

1. Despite a comprehensive legal framework, enforcement remains weak due to limited monitoring and investment-oriented priorities.

2. High unemployment among graduates reflects a misalignment between education and labor market needs.

3. The dominance of the informal sector highlights insufficient decent formal employment.

4. Decent work must be the central orientation of labor law, ensuring not only job creation but also social protection, fair wages, and humane working conditions.

Ultimately, Indonesia's labor law reform must strengthen regulation, improve enforcement, enhance human resource quality, and promote inclusive economic policies to fulfill the constitutional mandate of dignified and decent work for all citizens.