While the country's unemployment rate remains high, there is a tendency among local companies to recruit fresh graduates over the longer-term unemployed who mainly prefer to open their own small businesses, the Central Statistic Agency (BPS) says.
"Every year, there are around 2.5 million fresh graduates looking for jobs, but employers can only provide about the same number of jobs, which are mainly given to those new graduates," BPS chairman Rusman Heriawan said Monday.
"This means the number of unemployed workers stays the same from year to year -- around 10 million people nationwide," he said.
Graduates include those who have just graduated from high school and university.
Companies prefer hiring younger workers because they can work longer hours, and are easier to train, Indonesian Employers Association (Apindo) chairman Sofyan Wanandi said.
Better physical health is also an important factor in choosing a potential worker, he added.
"In Indonesia, companies have to train their workers first, so it means they would lose out if workers cannot work for longer hours," he said.
According to BPS data, at February 2007 the number of people in the labor force was around 108 million, among some 162 million Indonesians over the age of 15.
The agency said some 10.01 million Indonesians were unemployed in August last year, with some 3.84 million in Greater Jakarta alone.
Rusman said most of Indonesia's unemployed work in the informal sector, for example opening street stalls or becoming ojek drivers.
"While these people's income is factored into the country's gross domestic product (GDP), they do not support the economy because basically they work to survive," he said.
BPS says ideally every 1 percent economic growth should employ some 400,000 workers. But in reality, the growth has only seen some 180,000 workers get jobs.
Sofyan said 70 percent of the country's workers were engaged in the informal sector, a figure which it deemed volatile in supporting a sustainable economy.
"The informal sector does not support a productive economy," he said.
He said the government should revive the country's lagging real sector to fuel the productive economy which could provide employment.
Despite higher economic growth last year, analysts are concerned that the growth did not originate from the real sector.
Sofyan said the country needed more investments to revive the real sector.
"Investment is the only thing that can help us drive the real sector, which will eventually create more jobs," he said.