Indonesia Faces Challenges in Providing Employment for 44 Million Young People

Medan, Indonesia – Andreas Hutapea, having graduated with a law degree two years ago, initially harbored hopes for a swift transition into a stable career. However, his journey has been fraught with challenges and setbacks.

Hutapea’s ambition was met with the stark reality of Indonesia’s competitive job market, illustrated by his inability to pass the civil service exams, where a mere 3 percent of candidates secure positions. Also, his aspiration to become a trainee prosecutor did not materialize, further compounding his difficulties. Prior to his law studies, Hutapea had considered a career in the military, but he unfortunately did not meet the height requirements for enlistment.

As financial pressures mounted, Hutapea returned to live with his parents, who operate a modest grocery store selling staples such as oil, eggs, and rice. Since then, he has taken on the responsibility of running the shop. “I open the store in the morning, assist customers throughout the day, and help close up at night,” Hutapea explained. Despite not receiving a wage from his parents, he expressed understanding of their circumstances, appreciating the provision of food and shelter in their supportive household.

Hutapea’s experience reflects a broader trend in Indonesia, which grapples with one of the highest youth unemployment rates in Asia. Government statistics show approximately 16 percent of the nation’s over 44 million young individuals between the ages of 15-24 are unemployed, a figure exceeding that of neighboring countries such as Thailand and Vietnam.

A January survey from the ISEAS-Yusof Ishak Institute in Singapore indicated that Indonesian youth harbor notably pessimistic attitudes towards their economic prospects and governmental efficacy, with only 58 percent expressing optimism about the government’s economic initiatives—a figure significantly lower than the 75 percent average reported among peers in neighboring Southeast Asian nations.

This sentiment has occasionally spilled into public demonstrations, as seen in February when university students initiated the “Indonesia Gelap” (Dark Indonesia) movement, advocating against proposed cuts in public service expenditure.

Economists highlight various factors contributing to this high youth unemployment, such as stringent labor laws that complicate hiring processes and insufficient wage levels that fall short of attracting capable workers. Adinova Fauri, an economist at the Centre for Strategic and International Studies (CSIS) in Jakarta, emphasized that many individuals may opt out of the job market rather than settle for salaries that do not align with their expectations.

In response to the pressing issue of youth unemployment, Indonesian President Prabowo Subianto has acknowledged the urgency for job creation and has established task forces aimed at addressing the situation. His administration views the relationship with the United States as vital, having recently welcomed a trade deal that promises to lower tariffs on Indonesian exports, fostering a new era of mutual economic benefit.

While Indonesia’s overall unemployment rate stands at about 5 percent, the bulk of employment opportunities are often characterized by instability and low compensation. Notably, as per 2024 figures from the Bureau of Statistics, over half of the Indonesian workforce is engaged in the informal economy, exposing millions to precarious conditions without adequate social security.

Hutapea’s aspirations continue to be tested as he navigates the challenges of finding a suitable legal position. Despite his qualifications, he finds himself deterred by the lack of available opportunities. Recently, he interviewed for a role managing ATM cash replenishment, but despite feeling optimistic about his chances, he has yet to receive feedback.

For Hutapea and many like him, the struggle for stable employment underscores the disparity between academic qualifications and market demands, as well as the pressing need for effective vocational training and apprenticeship programs tailored to the current economic landscape. Such initiatives could play a crucial role in bridging the gap between education and employment for Indonesia’s youth.

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