Business Owners Warn Indonesia's Job Market is at Yellow Light, Government's Response

The government has responded to warnings from business owners regarding the condition of Indonesia’s employment sector, which is said to have entered a “yellow light” phase. Previously, Bob Azam, Chairman of the Employment Sector of the Indonesian Employers Association (Apindo), revealed that Indonesia’s employment situation is currently at “yellow light,” where many prospective workers remain unabsorbed into available jobs. In response, Susiwijono Moegiarso, Secretary of the Coordinating Ministry for Economic Affairs, stated that challenges in the labour sector are indeed not easy. Nevertheless, the government has prepared various programmes and policies to expand job opportunities. “The government has actually prepared many things for job opportunities. It’s not easy, as there are trends like job disruptions and so on,” Susi said when met at Djakarta Theater, Central Jakarta, on Wednesday (15/4/2026). According to him, the government has currently prepared various special incentive schemes. Primarily, for labour-intensive sectors deemed capable of absorbing large numbers of workers. Not only that, Susi explained that government policies are also directed towards encouraging industries that can utilise the potential of the middle class as an economic driver. “We have provided various special incentive schemes for labour-intensive industries, industries that can generate from the potential of the middle class and so on. So actually, what the government has prepared is already in the pipeline,” he said. One highlighted programme is the internship scheme for new graduates or fresh graduates for six months, which has been implemented. Susi said that the programme will be continued this year. “That’s why if you look at it, for fresh graduates, we created a six-month internship programme and we will continue it this year. That’s actually something extraordinary,” he said. Previously reported, business owners revealed that the labour condition in Indonesia currently requires serious attention because many workers remain unabsorbed into available jobs. This condition can be said to have entered the “yellow light” stage. “Currently, our employment condition, if I may say, is at yellow light. Why yellow light? Because every year there are 3.5 million new job seekers entering the workforce, but not all are absorbed,” said Bob Azam in his presentation at the Working Committee (Panja) meeting for the Employment Bill with Commission IX of the House of Representatives, on Tuesday (14/4/2026). He explained that for every one per cent increase in Indonesia’s economic growth, the available jobs can only absorb 200,000 to 400,000 workers. With Indonesia’s economic growth still around 5%, the absorbed workforce or those who have jobs only reaches 2 million people, the remainder, namely 1.5 million, do not get jobs or are not yet absorbed. “If we look at our economic growth, every 1% economic growth can absorb between 200,000 to 400,000 people, if all investments are labour-intensive. But if not labour-intensive, more capital-intensive, maybe 200,000 people, even only 100,000 people. So if our economic growth is 5% and all labour-intensive, only 2 million people are absorbed, the remaining 1.5 million are not absorbed,” Bob clarified. With many prospective workers still unabsorbed, they tend to shift to the informal sector, where welfare is generally minimal. “Especially if not labour-intensive, with many investments that are capital-intensive, maybe less than 100,000 people. Thus, the burden of workers entering the job market is very heavy, and if not absorbed, they will shift to the informal sector,” he explained. Bob added that informal sector workers in Indonesia reach 60%, while the rest, namely the formal sector or working in companies, only reach 40%. Even, the informal sector often does not pay taxes, thus eroding state revenue. “If we look at the informal sector, now the number of informal workers is 59%, maybe now more than 60%. So only less than 40% in the formal sector, formal workers. And informal workers are non-tax payers, so even though our employment is said to be decreasing, but as long as they work in the informal sector, it won’t affect state revenue. Because they don’t pay income tax. This is also one of the issues we face in employment,” he said.