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Growing informal sector signals lack in job creation
Most Indonesian workers are employed in the informal sector, and their number is growing, due primarily to labor informalization, experts warn.
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Becak drivers await passengers in the Ciputat Region, South Tangerang, Banten, on April 13, 2020. (JP/Dhoni Setiawan)
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ost Indonesian workers are employed in the informal sector, and their number is growing, due primarily to labor informalization, experts say.
Data from Statistics Indonesia (BPS) show that, as of February this year, the group comprised more than 60 percent of the 138.63 million active workers in Indonesia, compared with the 56.64 percent of the working population in February 2020.
BPS describes the informal sector as being characterized by a lack of legal registration and by self-employment of workers in “invisible” locations, such as small shops that tend to remain small-scale operations.
“From the argument of decent livelihood and income, it is obviously a problem,” Association of Lecturer and Labor Law Practitioner Indonesia (P3HKI) chairwoman Agusmidah told The Jakarta Post on Thursday.
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Labor experts say most informal workers have a low level of education, with the majority of elementary and middle school graduates ending up in the informal sector.
Over 70 percent of people in the group with no education higher than elementary school worked as informal workers in 2022, while that share dropped to 59 percent among middle school graduates, BPS data show.
