IPB University Economic Expert Reveals Reasons for Increasing Difficulty in Finding Jobs in Indonesia
The unemployment rate in Indonesia remains a serious issue. According to IPB University expert, Prof Alla Asmara, the causes of job scarcity in Indonesia are highly complex, ranging from economic growth slowdown to a mismatch between labor demand and supply.
“Macroeconomic developments are a fundamental factor influencing job creation,” stated Prof Alla, a Professor at the Faculty of Economics and Management, IPB University.
She explained that in the first quarter of 2025, the national economy experienced a slowdown compared to the first quarter of 2024. This was triggered by a decrease in government spending and weakening public purchasing power. This condition impacted the decline in demand for goods and services in the market.
“As a result, several business sectors are under pressure. In fact, quite a few companies are conducting layoffs (PHK),” she said.
Moreover, the imbalance between the working-age population and the availability of jobs further exacerbates the situation. Every year, millions of new entrants join the workforce, yet job growth cannot keep pace. Ironically, when job vacancies do exist, the skills of job seekers often do not match industry needs.
“This leads to many positions remaining vacant, while the unemployment rate does not decrease,” Prof Alla added.
The development of digital technology also has a significant impact on the structure of the job market. While digitalization increases efficiency, it simultaneously reduces the need for human labor, especially for manual and repetitive tasks. Sectors such as manufacturing, banking, and retail are now widely adopting automation and self-service, which affects the reduction of human labor involvement.
“If this digital transformation is not balanced with the creation of new types of jobs, such as in technology, digital marketing, or the creative economy, then the unemployment rate will be difficult to reduce. Therefore, people’s digital skills must be improved,” she emphasized.
Prolonged unemployment, she continued, has direct implications for the social aspects of society. Losing a job means losing a primary source of income, which can lead to poverty. In the long term, this impacts access to education, health services, and has the potential to increase crime rates.
“Economic pressure can push some people to take illegal shortcuts to survive. If left unchecked, this will create social instability and worsen economic inequality,” she stated.
According to Prof Alla, the unemployment problem cannot be solved partially. A structured, integrated, and sustainable approach is needed, involving the government, businesses, educational institutions, and civil society.
She recommended several long-term strategies, including revising regulations that hinder competitiveness and job creation, revitalizing vocational education and training to align with industry needs, and strengthening micro, small, and medium enterprises (MSMEs) and the creative economy sector.
Furthermore, support for the startup ecosystem, the development of new industrial zones both in Java and outside Java, and cross-sector collaboration are also considered important to create new jobs and face technological disruption and global economic crises.
“If we do not promptly improve and adapt to global changes, the challenge of unemployment will become even more complex. We need comprehensive cooperation to build an inclusive and crisis-resilient labor market,” Prof. Alla concluded. (AS) (IAAS/EXC)
