Jakarta. Indonesia’s job market is showing signs of strain as more than 10 million people are seeking work each year, indicating the gap between steady headline employment figures and the reality of a fast-growing labor force.

The Manpower Ministry estimates that at least 10.7 million Indonesians are seeking employment annually. That number reflects a combination of about 3.5 million new graduates entering the workforce each year, alongside millions already unemployed or laid off and others who have left jobs in search of new ones.

“Every year, there are 3.5 million new high school and university graduates. On top of that, we still have 7.2 million Indonesians who are unemployed, plus those who lose their jobs or resign. In total, more than 10 million people are looking for work,” said Surya Lukita Warman, head of the ministry’s labor market center.

Official data show the unemployment rate at 4.76 percent in February 2025 — the lowest since Indonesia’s democratic transition in the late 1990s. Yet in absolute terms, that still means 7.2 million people without work. Youth joblessness remains stubbornly high at 16.16 percent, compared with just 1.67 percent among workers aged 60 and above.

The labor force has grown rapidly, reaching 153 million in February 2025, up 3.67 million from a year earlier. Wholesale and retail trade created the largest number of new jobs over the past year, employing nearly one million additional workers. Average monthly wages grew just 1.78 percent to 3.09 million rupiah ($190), barely keeping pace with inflation.

Beyond the headline figures, the ministry acknowledged deeper challenges, including a mismatch between graduates’ qualifications and the skills demanded by employers, the low quality of much of the workforce, and disruption from technological change. The rise of artificial intelligence, digitalization, and the global transition toward green industries are reshaping the job landscape.

At least 70,000 workers were laid off between January and April this year, according to the Labor Party and allied trade unions, nearly matching the nationwide increase in the number of unemployed over the past year.

To improve job matching, the government is pushing companies to comply with a 2023 presidential regulation that requires all employers to report vacancies. It has also launched digital platforms such as KarirHub, a state-managed job portal, and SiapKerja, a “super-app” offering integrated labor market services.

Officials argue that faster adoption of such systems, alongside more investment in training and reskilling, will be essential to meet the employment needs of a young and expanding workforce.

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