Ministry of Manpower's MagangHub and the Challenge of Alleviating Millions of Unemployed
Recent data shows that the national economy continues to record relatively strong growth in numerical terms. The Central Bureau of Statistics (BPS) reported that Indonesia’s economy in the second quarter of 2026 grew by 5.29 per cent year-on-year.
During the same period, the Gross Domestic Product (GDP) at current prices reached Rp6,552.1 trillion, while GDP at constant prices reached Rp3,576.2 trillion. At first glance, this achievement suggests that Indonesia’s economic fundamentals remain on a positive track. However, upon closer inspection, there are signals of a slowdown that require serious attention.
Economic growth in Q2 2026 was recorded lower than in Q1 2026, which reached 5.61 per cent. This decline in the growth rate indicates that the economic engines have not yet fully recovered and still face various pressures from both domestic and global factors.
Regarding the fiscal condition, the relatively high economic growth figure has not been fully reflected in the real condition of the community. The phenomenon of layoffs (PHK) still occurring in various sectors shows a gap between macroeconomic performance and the quality of welfare. Economic growth should not stop at increasing GDP figures, but should also be able to create wider, more productive, and sustainable employment while maintaining public purchasing power. When growth is recorded as positive, yet layoffs continue, the fundamental question is: who is actually enjoying this growth?
Deep analysis reveals that one of the pillars of economic growth in Q2 2026 came from government consumption. The Free Nutritious Meal (MBG) programme is cited as one of the factors supporting economic activity. BPS noted that government consumption grew by up to 15.97 per cent year-on-year during that period. This figure demonstrates the significant role of government spending in supporting growth.
However, this condition also necessitates evaluation. As growth becomes increasingly dependent on government consumption, the effectiveness of state spending becomes crucial. Fiscal policy must not merely involve absorption of funds but must produce a real multiplier effect for the economy. Amidst various governance issues within the National Nutrition Agency (BGN) and the implementation of the MBG programme, an important question arises: to what extent does every rupiah of state spending truly return to the community in the form of increased income, employment opportunities, productivity, and purchasing power?
Another issue is visible in the labour structure, where informal workers reached approximately 1.16 million people, higher than the addition of formal workers which stood at around 740,000. Consequently, nearly six out of ten working residents still rely on the informal sector. This figure does not merely speak to labour statistics, but indicates that economic growth has not been fully translated into the expansion of productive, stable, and socially protected formal employment. If economic growth continues without being accompanied by a transformation in employment structure, we risk having growth that is statistically strong but fragile in the daily lives of the people.
Alleviating millions of unemployed: Latest data as of May 2026 shows that 7.22 million people of working age remain unemployed, and approximately 14.31 per cent, or 1,033,182 people, among them are graduates ranging from applied bachelor’s to doctoral levels. This indicates that the labour issue lies not only in the quality of the workforce but also in the limited economic space to absorb them.
The Ministry of Manpower’s MagangHub programme is one of the government’s responses to this labour issue. However, it must be remembered that internships are essentially a short-term stimulus, not a structural solution. Furthermore, when internship incentives are funded by the State Budget (APBN), this policy faces fiscal limitations and does not immediately create permanent jobs. Once the internship period ends, participants still face the potential of returning to unemployment if not followed by the creation of sustainable employment.
Moreover, the technical regulations for the implementation of the Ministry of Manpower’s MagangHub set a maximum graduation limit of one year from the date of issuance of the diploma or professional certificate at the time of registration. Under this provision, participants who can access the practical programme are only fresh graduates whose diplomas were issued no more than one year prior to registration.
The problem is that such a policy design narrows the scope of MagangHub relative to the much more complex reality of unemployment in Indonesia. Unemployment does not only stem from fresh graduates. There are workers who have lost their jobs, long-term graduates who have not been absorbed by the labour market, workers affected by industrial restructuring, those affected by the COVID-19 pandemic, as well as those experiencing skill mismatches who need opportunities to re-enter the labour market.
By limiting participants to graduates of no more than one year, MagangHub ultimately only touches a small part of the labour problem. This programme resembles an instrument for transition from education to the world of work rather than a long-term unemployment alleviation policy. Therefore, if it is to be positioned as a sustainable labour policy instrument, MagangHub needs to move away from a paradigm that is too oriented towards fresh graduates. Internship policies should be designed to be more adaptive to labour market dynamics and open to various groups.