{
    "success": true,
    "data": {
        "id": 2026269,
        "msgid": "proceed-with-caution-national-internship-programme-risks-fuelling-substitution-of-cheap-labour-1791431572",
        "date": "2026-10-08 09:50:00",
        "title": "Proceed with Caution: National Internship Programme Risks Fuelling Substitution of Cheap Labour",
        "author": "",
        "source": "CNBC",
        "tags": "",
        "topic": "Social Policy",
        "summary": "The Center of Reform on Economics (CORE) Indonesia has warned that the government-funded MagangHub national internship programme could encourage firms to replace regular workers with low-cost interns, since the state fully covers allowances and the scheme is ongoing. The economists acknowledge its value in easing the school-to-work transition, but note that its 150,000-place quota covers only about 2.1% of the 7.22 million unemployed and excludes senior high and vocational school graduates, who account for over half of joblessness. CORE recommends shifting evaluation toward quality indicators, tightening curriculum and mentor standards, introducing cost-sharing with large firms, and extending internships to SMA and SMK graduates before any expansion of the quota.",
        "content": "<p>Economists at the Center of Reform on Economics (CORE) Indonesia have\nwarned that the national internship programme, MagangHub, carries a risk\nof encouraging companies to replace regular recruitment with cheap\nlabour.<\/p>\n<p>In the CORE Monthly Review, the economists note that because the\ngovernment fully funds interns\u2019 allowances and the programme is set to\ncontinue, firms could come to rely on this workforce on an ongoing\nbasis.<\/p>\n<p>\u201cThe allowance fully covered by the government also makes MagangHub a\nlow-cost recruitment tool, which risks substituting regular workers or\nturning participants into cheap administrative staff,\u201d the think tank\nsaid in its latest report, cited on Thursday (8 October 2026).<\/p>\n<p>Nonetheless, the CORE Indonesia team acknowledges that the National\nInternship Programme, delivered through the MagangHub platform, can\naccelerate the school-to-work transition by providing six months of work\nexperience to Diploma 3 (D3) and bachelor\u2019s (S1) graduates within one\nyear of graduating.<\/p>\n<p>Participants receive an allowance equal to the minimum wage, fully\nfunded by the government, along with work accident and death insurance\nand a competency certificate.<\/p>\n<p>In 2026, the government has allocated Rp4.2 trillion for the second\ncohort, with a quota of 150,000 participants, up from 100,000 in the\nfirst cohort in 2025.<\/p>\n<p>Although the programme can address the barrier of work experience\nrequirements through on-the-job training, its quota of 150,000\nrepresents only around 2.1% of the 7.22 million unemployed people\nrecorded in May 2026.<\/p>\n<p>The D3 and S1 requirements also mean the programme has yet to reach\nsenior high school (SMA) and vocational high school (SMK) graduates, who\nmake up more than half of the national unemployed (50.39%).<\/p>\n<p>The economists therefore argue that MagangHub can only serve as a\nshort-term buffer for the problems facing young labour market entrants,\nwhile its long-term effectiveness will depend on economic growth and the\nabsorptive capacity of industry.<\/p>\n<p>For this reason, CORE Indonesia believes several improvements are\nneeded before the quota is expanded. These include shifting from\nmeasuring participant numbers to quality indicators, such as job\nretention beyond one year, the semi-unemployment rate among alumni, and\nthe wage gap between alumni and the national average wage, through\ntracer studies integrated with BPJS Ketenagakerjaan data.<\/p>\n<p>Further measures include standardising the curriculum and mentor\nquality, and limiting the ratio of interns to permanent staff to prevent\nthe substitution of regular workers.<\/p>\n<p>Finally, CORE recommends gradually introducing cost-sharing with\nlarge companies so the scheme does not place a permanent burden on the\nstate budget (APBN), and expanding internship pathways for SMA and SMK\ngraduates integrated with vocational education.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/proceed-with-caution-national-internship-programme-risks-fuelling-substitution-of-cheap-labour-1791431572",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}