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Indonesia and unemployment Name University Abstract An analysis of the challenges and trends facing the Indonesian labor market indicates a weak labor market afflicted with slow job growth rate with elevated levels of labor underutilization. Diverse groups of workers especially the youth, women and rural folks have a disparate labor market outcome indicating a problem of labor market segmentation (Top of Form Yenilmez, & Kiliç, 2017). The government’s increase of investments in the education sector over the years has expanded the pool of educated and skilled workers even though these investments are yet to translate into a substantial gain in labor productivity. Under qualified workers still work in many positions with a lack of skilled labor still posing a major challenge. Access to re-skilled and up-skilled opportunities are still limited and without proper investment in the better quality of education and training, career mobility and access to quality jobs will continue to be limited. Nevertheless, regular wage employment has expanded while informal employment is on the decline even though many of the workers are employed on short-term contracts. Also, growth in minimum wages has outpaced average wage leading to a weak demand in labor market performance. Keywords: Rate of unemployment, structural unemployment, jobless recovery, employment, labor force Introduction The regime of President Suharto ushered in the new economic development order that has led to a jobless recovery in the Indonesian economy leading to a decline in unemployment rate. The biggest gainers in employment were the services and manufacturing sectors that saw large increases in
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