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Informal employment remains stubbornly high despite slight improvement
While the proportion dropped slightly in August, informal arrangements still account for 59.45 percent of overall employment, which means most workers lack social security and decent pay.
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A batik seller speaks to a customer at a traditional market in Yogyakarta in this undated file photo. (World Bank/Nugroho Nurdikiawan Sunjoyo)
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nformal employment remains huge in Indonesia despite some improvements, with job growth in the formal sector limited even as companies look to rehire after slashing staff during the COVID-19 pandemic.
The share of informal workers was recorded at 59.45 percent in August, according to figures published by Statistics Indonesia (BPS) on Nov. 5, down 1.02 percentage points from a year earlier, as the number of employers assisted by temporary workers and the number of unpaid family workers fell, while the number of formal workers increased.
Most of those in the informal sector are own-account workers, which refers to self-employed people not engaging anyone to work with them. This is followed by employers assisted by temporary workers. Next are the categories of unpaid family workers, casual workers outside of agriculture and casual workers in agriculture.
“Usually, when the economy improves, the formal sector grows,” BPS head Margo Yuwono said in an online press conference on Nov. 5.
Informal workers usually lacked social security, a legal contract and decent pay, BPS reported in June.
Read also: Informal workers in Southeast Asia: Resourceless, yet resourceful
The large proportion of informal employment in Indonesia goes hand in hand with the fact that the majority of the workforce lack higher education. A huge proportion of those work in agriculture.
