Jakarta. Indonesian Employers Association (Apindo) has raised concerns over Indonesia’s persistently high youth unemployment, with the jobless rate among Gen Z still hovering around 17 percent, a pressure point for both the government and employers heading into 2026.

“Youth unemployment is still quite high, around 17 percent. This will become our homework for 2026,” Apindo’s Head of Labor Affairs Bob Azam said on Monday.

Bob said that most unemployed young people come from senior high school graduates, making up about 8 percent to 9 percent, while primary school graduates contribute only around 2 percent.

“Those with only primary education may be less selective, they tend to take whatever job is available,” he said.

He underscored the need to push investments that can absorb medium- to higher-educated workers. However, he warned that the hiring capacity of investment continues to decline. “Back in 2013, Rp 1 trillion in investment could absorb around 4,500 workers. In 2025, it’s only 1,364. This shows investment is becoming more capital-intensive,” he said.

Bob added that the quality profile of the workforce remains an obstacle, with 30 percent still consisting of primary-level graduates.

Even so, Apindo sees some positive momentum. The open unemployment rate dropped from 5.3 percent to 4.7 percent in 2025. But structural challenges endure. “The informal sector still dominates about 60 percent of jobs, while the formal sector only absorbs around 40 percent,” he said, adding that slower manufacturing growth compared to the broader economy continues to drag on formal job creation.

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