According to data from Statistics Indonesia (BPS) that was published yesterday, Indonesia's unemployment rate has fallen to 5.92 percent in February 2013 from 6.14 percent in August 2012. BPS, a government agency, always takes the months February and August as bases to release its (un)employment figures. From August 2012 to February 2013 about 3.1 million Indonesians were added to Indonesia's labor force. This means that the country's current labor force numbers 121.2 million people (out a total population of 240 million).
Of this total labor force 114.0 million are employed, the remaining 7.2 million are unemployed. Sectors that saw large increases in its number of workers towards Indonesia's total work force in the period February 2012 to February 2013 were construction (+12.95 percent), trade (+3.29 percent), and industry (+4.01 percent). Indonesia's agricultural sector, on the other hand, lost 3.01 percent.
More than a decade of macroeconomic growth has succeeded in pushing Indonesia's unemployment rate into a steady downward trend. But, as around two million Indonesians enter the labor force each year, it will be a challenge for the Indonesian government to stimulate job creation so that the labor market can absorb this group of annual newcomers; youth unemployment (among the freshly graduated) in particular is a cause for concern and action.
With around 240 million people, Indonesia is the fourth most populous country in the world (after China, India and the United States). Moreover, the country has a young population as around half of the total population is below the age of 30 years. Combined, these two features imply that Indonesia currently contains a large labor force; one that will grow larger in the foreseeable future.
Vulnerable employment (unpaid workers and own-account workers) - mostly found in Indonesia's large informal sector - for both men and women remains high compared to developed countries and its regional peers. Currently, Indonesia's vulnerable employment is about 60 to 70 percent according to World Bank reports.
¹ data from February 2013
Source: Statistics Indonesia