Alfida Rizky Febrianna, Arnoldus Kristianus, Jakarta – Recent data from the Central Bureau of Statistics (BPS) revealed that nearly 10 million Indonesians aged 15-24 are unemployed. Minister of Manpower, Ida Fauziyah, attributed this to a mismatch between education and the demands of the job market.
"Typically, those aged 24 have just completed their bachelor's degree, while 18-year-olds have recently graduated from high school. Many of our unemployed are actively seeking employment after finishing their education," she said at a meeting with the House of Representatives Commission IX on Tuesday.
Ida emphasized the importance of aligning education and training with market needs to combat unemployment, particularly among vocational and high school graduates. To address this, the government is focusing on developing vocational education and training programs tailored to labor market demands.
"Educational and training initiatives must be in line with market requirements. Preparation should consider the needs of the job market," she emphasized.
In line with this objective, the government enacted Presidential Regulation No. 68 of 2022, aimed at revitalizing vocational education and training to reduce workforce mismatches and alleviate open unemployment in Indonesia.
Meanwhile, Raden Pardede, Assistant to the Chief Economic Affairs Minister, expressed concerns about the high unemployment rate among Generation Z and its potential impact on tax revenue. He highlighted the need for the economic sector to embrace technology to absorb the workforce, especially considering the preference of young people for remote work.
"Our sectors must adapt to a young, tech-savvy workforce. Labor-intensive work alone is no longer sufficient," Raden stressed.
Furthermore, the prevalence of informal sector employment poses challenges to tax revenue. BPS data from February 2024 revealed that 84.13 million individuals (59.17 percent) were engaged in informal activities, compared to 58.05 million (40.83 percent) in formal employment.
"If too many individuals remain in the informal sector, tax revenue will likely decline, impacting savings and social security contributions. Unregistered workers in the informal sector do not benefit from the social security safety net, leading to long-term issues," Raden said.