Education reform could reduce unemployment among graduates

Aziz, Kuala Kencana, Papua

The rate of university-educated unemployment in Indonesia is at an alarming level and James Alderson, in his article on May 22, analyzed the reasons why many graduates in Indonesia remain unemployed, focusing particularly on their failure to meet corporate standards of recruitment.

His analysis basically pointed to the mismatch inadequate quality of training in universities as the main contributors to the unemployment.

What may have been overlooked in Alderson's analysis is that for Indonesians being unemployed is not an option, socially and economically. This is different from several developed countries, primarily those with good welfare systems.

The important implication of this situation is that typically, for most parents in Indonesia, the options are: a) send their children right out after high school and help them find a job, although the pay will not be good, or b) send their children to university with additional and, more often than not, considerable expenses in the hope of a better job and pay.

It comes as no surprise that demand for higher education continues to increase with the growth of the population. Every year some 400,000 students graduate from high school and perhaps only 75,000 seats are available in public (state) universities. Public universities are generally considered good quality and affordable.

Some private universities fill the gap by offering comparable educations, but with higher tuition. Assuming these good private universities offer approximately the same number of seats as public universities, the combined available seats would absorb only 150,000 students, leaving the rest to either stop their educations or attend lower quality universities.

Naturally, every parent wants their children to continue their education, no matter what. So parents keep sending their children to university. Yet they forget, or are unaware, that university graduates have different expectations than high school graduates. High school graduates know they have few qualifications, and so they accept "blue-collar" jobs that many university graduates would refuse.

In theory, however, if university graduates take jobs that require few qualifications national productivity would increase accordingly. For instance, what happens if an engineer takes a job as a laborer in a garment factory? The engineer should be able to make shoes two or three times better in terms of quality and quantity than a poorly educated laborer.

Investors probably would love to pay higher wages as long as the higher wages guaranteed higher productivity. Unfortunately that is not likely to happen.

This is first because of a lack of willingness to fill the blue-collar jobs, and second because even a willingness does not come with guaranteed higher productivity.

As mentioned earlier, Indonesia does not have a social security system that allows unemployment as an option. The way it works is that the family, or extended family, will support the unemployed as their lifelong responsibility. So they keep sending their children to university even though their children eventually may still be unemployed.

The solution for unemployment has got to be simultaneous both from society in changing the perception of the importance of higher education, and from government and universities in changing from a visionary to a strategic approach for overcoming the high unemployment rate among university graduates.

What Alderson proposed in giving students "hands-on" experience to help them adapt to the corporate world after graduation is not new.

Wardiman Djojonegoro, former minister of culture and education, once introduced the concept of "link and match", which undoubtedly was inspired by the education system in Germany.

Unfortunately, this program has not been heard of since Wardiman Djojonegoro left his post. In any event, link and match is not a simple task. It requires a grand design in national manpower planning that must be closely coordinated with developments in the national economy, and requires the full support of the private sector.

The basic question of link and match is how many engineers, accountants, scientists and other professionals to produce to match the needs of the economy? How many universities are needed and how to control the quality of these institutions? These questions are at the center of the problem and without the answers the development of higher education will remain lacking.

Back in 1972, Lee Kuan Yew, in a speech to university students ion Singapore, addressed the matter of how many engineers to produce. Lee told the students that the government had to set priorities considering the significant cost of subsidizing engineers, technicians and technical students, and how to match the future workforce with economic development.

Lee observed that the U.S. and Britain had different approaches from one another. In the U.S. system, the ratio of engineers to technicians was 1:2, and engineers also did the job of technicians, hence earning a higher income than British engineers, who supervised an average of eight technicians.

After evaluating the leading sectors that Singapore needed to focus on, and the cost benefit of each type of system, Lee decided to adopt the British approach for the ratio of engineers to technicians.

He said Singapore's government would review this policy over the next five years and another review would take place within 10 years.

Indonesia, with its vast size and diversified economy, might need a different approach but should follow the same basic principle. The leading sectors in Papua are certainly different from those in Java, hence it will require different tactics to determine the types of education needed for each place.

Leading economists now say that the world is heading for competitive advantage, as opposed to the "old" comparative advantage. Indonesia is having trouble maintaining some of its comparative advantages (like cheap labor), let alone achieving competitive advantage.

Unless more comprehensive and strategic measures for education reform are taken and consistently implemented, getting a degree as a form of deferred unemployment will continue to be the norm rather than the exception. We will be lucky if this does not become an explosion that eventually turns into social unrest.

The author, a free-lance writer, can be reached at aziz@fmi.com