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Definition of Employment and Employment Problems in Indonesia – Employment is everything related to labor. In Law No. 13 of 2013 concerning manpower, it is defined as all matters relating to labor before, during, and after the work period.

According to Article 1 paragraph (1) of Law Number 13 of 2003 concerning Manpower, it states, “Employment is all matters relating to labor before, during, and after the work period. Check out a more complete explanation of the following employment issues.

Definition of Employment

Definition of Employment and Employment Problems in Indonesia

Employment is all matters relating to labor before, during, and after the work period. Employment issues are regulated in Law Number: 13 of 2003 concerning Manpower. An important element of employment is labor.

According to the provisions of Article 1 paragraph (2) of Law Number: 13 of 2003, what is referred to as manpower is: anyone who is able to do work to produce goods and/or services both to meet his own needs and for the community.

While part of the workforce is workers/labor, according to the law it is explained that worker/labor is anyone who works by receiving wages or other forms of remuneration.

With the development of technology and globalization, there have been various changes, including in the field of statehood. Where in order to improve the quality of the Indonesian workforce, the government seeks to create the widest possible employment opportunities as discussed in the book Implementing the Employment Creation Act in the Manpower Sector.

Definition of Employment According to Experts

In addition to what is described in Law Number :13 of 2003, what is meant by labor is also conveyed by experts, including the following:

1. Dumairy

Defining the workforce is the population who has an age within the working age limit. Dumairy provides an age limit to put forward his definition of labor in order to provide the actual reality as much as possible.

2. Ritonga and Paradise Yoga

Defining the workforce is people who are in the working age range who are ready to carry out work, including those who are already working, those who are looking for work, those who are currently studying (school), and also those who are taking care of the household.

3. Nature S

Defining the workforce is the population aged 15 years and over for developing countries such as Indonesia. As for developed countries, the workforce is the population aged between 15 and 64 years.

4. Suparmoko and Icuk Ranggabawono

The definition of labor is people who have entered working age and have a job, who are looking for work, and who are doing other activities, such as school, college, and taking care of the household.

5. Subri

Defining labor is the demand for labor participation in producing goods or services or the population aged 15-64 years.

6. Dr. A. Hamzah, SH

Defining labor is the population who work inside and outside the employment relationship with the main means of production in the production process is the labor itself, both physical and mental.

7. Sumitro Djojohadikusumo

Defining the workforce is all people who are willing or willing and have the ability to work, including those who are unemployed even though they are willing and able to work, but are forced to be unemployed because they do not have the ability to work.

8. Sjamsul Arifin, Dian Ediana Rae, Charles, and Joseph

They define labor as a factor of production that is homogeneous within a country, but is heterogeneous (not identical) between countries.

9. Sumarsono

Defining the workforce is all people who are willing to be able to work which is defined as all people who do work activities for themselves or others.

10. Eeng Ahman and Epi Indriani

Defining labor is the total number of people who are considered capable of working and able to work if there is a demand for work.

11. Dr. Payaman J. Simanjuntak

Defining labor is people who have been or are currently working, who are looking for work and also carry out other activities, such as going to school and also taking care of the household.

Labor Classification

According to Law Number 25 of 1997 concerning Manpower, explaining what is meant by labor is every man or woman who is in and/or who has done a good job outside the employment relationship to produce goods or services in meet community needs.

Law Number 14 of 1969 concerning Basic Provisions Regarding Manpower, explains what is meant by manpower is anyone who can do work both inside and outside the employment relationship in order to produce goods or services to meet a community need.

Based on the book entitled Introduction to Indonesian Manpower Law by Suratman which has been equipped with Law Number 24 of 2011 it states that human rights for work must be fulfilled.

From these several definitions of labor, a common thread can be drawn that labor can be classified into several groups. Labor classification is a grouping of workers arranged based on predetermined criteria, namely:

1. By population

Labor is the entire population that is considered able to work and able to work if there is no demand for work. According to the Manpower Act, those who are classified as workers are those aged between 15 and 64 years.

Also Non-labor are those who are considered unable and unwilling to work, even though there is a demand for work. According to the Labor Law no. 13 of 2003, they are residents outside the age, namely those who are under 15 years old and over 64 years old. Examples of this group are retirees, the elderly (elderly) and children.

2. Based on working limit

The labor force is the productive age population aged 15-64 years who already have a job but are temporarily not working, or who are actively looking for work. Those who are not in the workforce are those aged 10 years and over whose activities are only going to school, taking care of the household and so on. Examples of this group are: schoolchildren and students, housewives and the disabled, and the voluntary unemployed.

3. Based on the aspect of expertise/quality and education

Educated workers are workers who have an expertise or proficiency in a particular field by means of formal and non-formal schools or education.

For example: lawyers, doctors, teachers, and others. Trained workers are workers who have expertise in certain fields through work experience.

This skilled workforce requires repeated training so that they are able to master the job. For example: pharmacists, surgeons, mechanics, and others. Uneducated and untrained workers are unskilled workers who only rely on manpower. Examples: coolies, transport workers, housemaids, and so on.

Employment Problems

Development in various sectors carried out by Indonesia is in dire need of skilled workers with certain qualifications. Various job opportunities are open all the time throughout Indonesia, but there are far more job seekers than the available quota. This raises various employment problems which are described in detail in the Revised Edition of the Introduction to Employment Law.

The booming workforce looking for work can be seen in one example reported by In the process, it turns out that development is not only faced with limited skilled manpower, but there are many other problems. This condition can be seen from the many problems faced by employment in Indonesia, including the following.

1. Unequal Number of Workforce with Job Opportunities

A large population will produce a large workforce. A large workforce if it can be utilized properly will be able to increase economic activity which in turn will improve the welfare of the community.

However, this can only be achieved if the entire workforce is absorbed by job opportunities. Job opportunity is a condition that describes the availability of job opportunities in the community. This statement can be seen from the conditions of employment in Indonesia.

The large population of Indonesia coupled with the high rate of population growth that should be a driver for increasing economic activity has actually become a burden for economic development. However, the high rate of population growth is not accompanied by growth in employment opportunities. This is the main cause of unemployment.

2. Relatively Low Quality of Labor

The low level of education is one of the factors that affect the quality of the Indonesian workforce. Due to the low level of education, Indonesian workers lack knowledge and technology mastery. As a result, the amount of production produced is low while the cost of production is high.

The high cost of production makes it difficult for Indonesian products to compete with other countries’ products. In addition, the quality of labor also affects the high and low wages of workers. Labor wages in Indonesia are still relatively low compared to other countries, such as Serbia, China, Russia, Singapore, and Malaysia.

3. Uneven distribution of labor

In addition to the relatively low level of human resources, the employment sector in Indonesia is also faced with the problem of unequal distribution of labor. Most of the workforce in Indonesia is on the island of Java.

Meanwhile, in other areas with a wider area there is still a shortage of manpower, especially for the agriculture, plantation and forestry sectors. As a result, in Java there is a lot of unemployment. Meanwhile, in other areas there are still many natural resources that have not been managed and utilized optimally.

4. Unemployment

The number of the workforce that is not proportional to the employment opportunities results in not all of the workforce being absorbed by the workforce (unemployment). This is further exacerbated by the large number of workers who have been laid off. The severance pay of laid off employees is often not in accordance with the nominal value, the process is long, and it is not even paid.

Layoffs of employees can occur due to many things including bankruptcy, consolidation, separation, employers are not willing to accept workers in the company. In addition, the conditions of the corona pandemic have also made the economy sluggish which has resulted in many companies laying off employment (PHK) and making workers lose their jobs.

Impact of Labor Problems on the Economy

Employment problems can arise due to several factors such as education, job opportunities and relatively low economic growth. This is experienced by many countries, including Indonesia, because until now there are still many unemployed. Here are some types of unemployment:

1. Unemployment by nature

Unemployment based on its nature is divided into open unemployment is the labor force who does not work and does not have a job. Underemployment is a workforce whose work is not optimal in terms of working hours.

In other words, working hours in one week are less than 36 hours, and disguised unemployment is labor that does not work optimally because of excess labor.

For example, a farmer who works on a field is actually enough to only be done by one person. However, because his son did not have a job, he worked on the land. The farmer’s son is underemployed.

2. Unemployment by cause

Unemployment based on the cause is divided into:

a. Structural unemployment
Structural unemployment is unemployment caused by changes in the structure of the economy, for example from agriculture to industry. This condition automatically causes workers who have expertise in the agricultural sector not to be absorbed in the industrial sector, so they will be unemployed.

Cognitive and practical understanding of industrial relations disputes is explained in detail in the book Labor Law: Industrial Hub Disputes by Aries Harianto.

b. Frictional unemployment
Frictional unemployment is unemployment caused by sudden shifts in labor supply and demand, making it difficult to match job seekers with job vacancies.

c. Seasonal unemployment
Seasonal unemployment is unemployment caused by changing seasons. For example, a farm laborer will work at harvest time, but when the harvest period is over he will be unemployed.

d. Voluntary unemployment
This type of unemployment occurs because there are people who actually can still work, but voluntarily don’t work (ask to stop working). For example, an employee of a company stops working because he has a lot of money. Meanwhile, to make ends meet, he earns from the income of the money deposited or by renting out a house.

e. Technology unemployment
Technological unemployment is unemployment that occurs due to mechanization or replacement of human labor with machine power.

f. Deflationary unemployment
Deflationary unemployment is caused by more job seekers than available job opportunities

Manpower Planning Effort

Manpower planning aims to carry out a systematic manpower plan which can later be used as a reference in formulating policies, strategies, and other manpower development programs on an ongoing basis. The Government of Indonesia, in terms of determining policies and preparing manpower planning programs, grouped them into two groups.

Macro work planning and micro worker planning. It is compiled based on relevant analyzes and data sets and compiled in employment information. Employment information itself is collected from both the government and the private sector which has important elements in manpower planning.

1. Macro Manpower Planning

Systematic manpower planning by using labor optimally and productively to stimulate growth. The growth in question is economic and social growth both on a national, regional and sectoral scale that can open up the widest possible employment opportunities, so as to increase the productivity and welfare of workers.

2. Micro Manpower Planning

Unlike macro workforce planning, micro workforce planning has a smaller scope. The scope referred to here is only limited to the scope of the agency, be it government or private companies. In terms of understanding between macro and micro manpower planning have similarities.

In terms of micro worker planning, the meaning is systematic manpower planning in an agency, government or private. Aiming at the optimal and productive use of manpower to achieve higher performance in the relevant agencies.

With this plan, the Indonesian government is trying to give every citizen the right to a prosperous life and the right to get a job. Various other legal bases are discussed in the book on Labor Law in Indonesia.

Efforts to Overcome Employment Problems
The following are some forms of efforts to overcome employment problems:

  • Education policy: Through education and training, it is hoped that it will improve the ability of the workforce in terms of skills, knowledge and good attitudes.
  • Employment policy: The government should create as many job opportunities as possible. For example, the government opens job vacancies for civil servant positions. In addition, the government can also encourage the private sector to create as many job opportunities as possible.
  • Wage policy: This policy is also very important so that workers get wages that are not too low. Wages that are too low can affect the level of education, health and productivity at work.

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