JAKARTA: The unemployment rate fell in February to its lowest point in decades despite reports on mass layoffs and weakening purchasing power in recent years, though critics suggest the statistics do not capture the real picture due to an overstretched definition of what constituted employment.
In its biannual employment survey published on Monday, Statistics Indonesia (BPS) revealed that the national unemployment rate had dropped to 4.76% in February, compared with 4.91% six months ago and 4.82% in February 2024.
That translates into 7.28 million jobless people as of February, or 83,450 more people without jobs than the figure recorded in the same period last year.
BPS head Amalia Adininggar told a press conference on Monday that the increase in the jobless figure, notwithstanding the decline in the unemployment rate, was driven by “increase in the workforce” by 3.67 million people to total 153 million in the past year.
The national statistics bureau’s definition for employment derives from that of the International Labour Organization (ILO), or people “who worked for at least one hour for pay or profit” over one week or a period of seven days.
Based on this definition, BPS classifies people who worked at least 35 hours a week as employed full-time, while people who work less are divided into two classifications: employed part-time or half unemployed.
Said Iqbal, chairman of the Confederation of Indonesian Trade Unions (KSPI), cited this classification system as an indication of how out of touch BPS was in terms of the real state of joblessness in the country.
“This definition needs to be reviewed. There’s no way someone working for an hour a week is not unemployed or is, as per the term, a half-unemployed worker,” Said told The Jakarta Post on Wednesday.
He added that this classification was the reason for the gap between BPS’s jobless figure and the KSPI’s figure for laid-off workers, which amounted to 60,000 people in the first two months of this year alone.
The union’s lay-off data was compiled from its regional branches based on direct reports submitted by impacted workers of 50 companies, Said emphasised, meaning the actual figure could be higher.
In contrast, Manpower Minister Yassierli announced on Monday that only 24,036 people had been laid off nationwide in the first four months of this year due to various reasons including bankruptcy, downsizing and relocation.
However, he acknowledged that this represented an increase compared to the same period last year, given that the current figure was more than a third of the full-year tally of 77,965 people in 2024.
Said suggested that the Manpower Ministry’s data might involve under-reporting, since its figure was based on voluntary reports from companies that often intentionally shrink their numbers.
“Based on findings on the ground, businesses don’t normally report the full data because doing so would result in their own inspection,” said the KSPI chair, adding that the ministry could check such companies to ensure that laid-off workers received proper compensation.
He added that such companies were “concerned about the costs that spring up from their closure. That’s why they proceeded to report their number, albeit not aligned with the facts”.
Awalil Rizky, an economist at Jakarta-based think tank Bright Institute, said in an analysis published on Monday that the national unemployment rate did not reflect the current employment conditions, which had actually worsened.
He added that many who worked didn’t actually have sufficient employment, and some or even most did odd jobs to survive.
Awalil’s remarks are backed by BPS data, which show that people who have no schooling or completed only elementary school dominate employment with a share of 35.89%.
Moreover, the national data also included people classified as “family/unpaid workers” that contributed 14% to the total employment figure, equivalent to 20.16 million workers.
“In daily life, they are essentially unemployed,” Awalil said, adding that BPS might have included this group of workers because “they help other people earn an income or profit”. — The Jakarta Post/ANN
