Is Banten one of the highest unemployment rate in Indonesia?
Banten Province faces complex economic and social challenges, based on data from the Badan Pusat Statistik (BPS) it has the highest unemployment rate in Indonesia at 7.02% as of February 2024, despite having eight special industrial estates, while its economic growth is below the national average at 4.7% in the second quarter of 2024, affected by the phenomenon of factory relocation after the Covid-19 pandemic which caused massive layoffs and low employment.
How the number of employment and unemployment in Banten?
If we see in Employment Number in Banten 2019-2023 graph, there's increases in employement number from 2019-2022. But in 2023, there's dramatic decreases in employment. The recent year is lower than 2019. Dramatic decrease in employment is the impact result from decreases in Labor Force number in Banten.
Based on this data, as we can see there is increases in unemployment in 2020. Because the impact from the Covid-19 pandemic that happened in Indonesia. And after that, there's a good trend because the number getting lower after the pandemic. In 2023, the number is lower than 2019. But we cannot say this is a good comparison, because there's a differences in Labor Force in Banten 2019-2023.
As we can see, there's increases in Labor Force in Banten start from 2019-2022. When in 2023, we got dramatic decrease and lower than 2019. Of course is this affect with the employment number in Banten.Â
What Factors that can affect in employment and unempolyment in Banten especially?
1. Economic Growth
Banten's relatively low economic growth is one of the causes of the high unemployment rate. In the second quarter of 2024, Banten's economy only grew by 4.7% on an annualised basis, below the national growth of 5.07%4. This slow economic growth hampers the creation of new jobs.
2. Government Policy
Goverment policy is so affect for the number of employment and unempolyment. The Banten Provincial Government has made several efforts to reduce unemployment, such as:
  - MSME and creative economy development
  - Community-based training (such as make-up, barista, content creator training)
  - Competency improvement through the Job Training Center (BLK)
  - Collaboration with industry for apprenticeship programs
3. External Factors
Based on cases in Indonesia, COVID-19 pandemic: Banten's TPT reached 10.64% due to the pandemic in August 2020. Factory relocation: After the pandemic, there was a wave of factory relocation that caused massive layoffs and low employment.
4. Economic Structure
Banten has eight special industrial estates, but the manufacturing sector only absorbs around 13.28% of the workforce. This indicates a mismatch between economic structure and employment.
5. Skills and Education
There is a gap between the skills of graduates and the needs of the labor market. The government seeks to address this through training and skills development
6. Demographics
Banten has a large working-age population, with 65.94% of the working-age population economically active in February 2023.
7. Economic Sector Change
There is a shift in labor absorption between sectors. For example, the education sector experienced the largest increase in employment of 78.93 thousand people in February 2024.
8. Minimum Wage
Banten's relatively high minimum wage (IDR 2,727,812 in 2024) compared to other provinces such as Central Java (IDR 2,036,947) may influence companies' decisions in recruiting workers.
How to increase it based on Human Resource Economic theory?
To address the unemployment challenges in Banten, policymakers should focus on enhancing human capital through targeted education and training programs. By investing in skills development that aligns with the needs of local industries, particularly in the eight special industrial zones, Banten can create a more skilled and adaptable workforce.Â
This approach, rooted in human capital theory, suggests that improving workers' knowledge and abilities will increase their productivity and employability, ultimately leading to reduced unemployment rates.
after that, the government should collaborate with private sector companies to develop intership programs and on-the-job training opportunities. These initiatives would allow workers to gain practical experience and industry-specific skills, making them more valuable in the job market.Â
By fostering a culture of lifelong learning and continuous skill improvement, Banten can build a resilient workforce capable of adapting to changing economic conditions and technological advancements, thus creating a more dynamic and prosperous labor market in the long term.
Baca konten-konten menarik Kompasiana langsung dari smartphone kamu. Follow channel WhatsApp Kompasiana sekarang di sini: https://whatsapp.com/channel/0029VaYjYaL4Spk7WflFYJ2H
