I have degree in literature. I have a degree in education. I have a degree in economics. I have a degree in computing. I have a degree in languages. I have a degree in law.
We, of one million degrees all have the same title, the unemployed.
The Central Statistics Agency (BPS) reported last week that the unemployment rate had fallen to 4.65 percent in May, the lowest since 1994. Experts however say the real challenge is creating higher-quality jobs and ensuring university graduates possess the skills employers need.
Centre of Reform on Economics (CORE) economist Yusuf Manilet said the figure should be interpreted alongside job quality indicators, as international standards classify anyone working at least one hour a week as employed.
"The decline in unemployment has been driven more by an increase in vulnerable and low-productivity jobs than by the creation of stable formal employment", Manilet told the Jakarta Globe.
He noted that informal workers still account for 59.3 percent of employment, while around 10.8 million people remain underemployed. Long queues at job fairs and continued layoffs also suggest labour market pressures have yet to ease.
Deputy Higher Education, Science and Technology Minister Fauzan said the figures highlight a persistent mismatch between higher education and labour market needs. He warned that Indonesia continues to produce what he described as "educated unemployment", noting that about 1.1 million university graduates were unemployed last year.
Qisha Quarina, an economist at the Gadjah Mada University (UGM), said policymakers should look beyond headline employment figures and focus on whether people are finding decent and productive work. "The labour market problem is not solved simply because someone has a job. We need to look at what kind of work they have", she said.
While internship programs can help narrow the skills gap, Quarina said they cannot ensure permanent employment without stronger labour demand. "Improving labour supply alone is not enough. If companies are shutting down or investment is leaving Indonesia, workers with the right skills still will not be absorbed", she said.
She argued that labour market performance should ultimately be measured by adequate wages, social protection, workplace rights and long-term job security – not by a declining unemployment rate alone.
[Abridged from a Jakarta Globe article titled Indonesia's falling unemployment masks deeper labor market challenges.]
