Labor Force Analysis

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 318 SEAJ-SPI ISSN 2088-2955 Vol. 1, No. 3 (March 2013):318-327 Labor Force Analysis Asri Laksmi Riani and Muh. Yusuf Ariyadi (Faculty of Economy, Universitas Sebelas Maret, Solo, Indonesia) Abstract The development of employment in some countries in ASEAN is one of the causes of economic growth rate dynamics. Growth rate of the labor forces in Indonesia, Malaysia and Singapore in a few years, starting in 2010, 2011, and 2012 showed varied movements. In the three countries showed an increase in labor forces growth over time. However, the unemployment rate in Indonesia has decreased from year 2010 to year 2012. While the unemployment rate in Malaysia has increased, while in Singapore declined in 2011 and increased in 2012. In Singapore, the number of recruiters and employment continued to increase in 2010-2012. In Malaysia, in line with the unemployment rate, the same thing happened in the workforce both male and female. Largest order of the labor force respectively in Malaysia started from the field of services, manufacturing, agriculture and mining. In contrast to Malaysia, in Indonesia, the largest labor force in the order starting from the fields of agriculture, trade, services, industry, and transport, storage and communication. The article describes the comparison of the labor in Indonesia, Malaysia and Singapore. Keywords: labor force, employment, unemployment. Introduction In the employment context, a variety of improvements in macroeconomic indicators has yet to give an encouraging impact on the creation of employment opportunities in Indonesia. Seen from the reality of rising unemployment: In 2000 unemployment rate of 6.08 percent to 9.67 percent in 2003 and 9.75 percent in 2007 (Biro Pusat Statistic). Indonesia's labor market is dualistic. Modern sector employment (formal) with relatively little labor and a traditional sector (informal) with a large amount of labor both are running simultaneously in the economy. Modern sector have higher wages and better working conditions compared to traditional sectors. In addition, the modern sector workers have the opportunity to gain skills and access to training so it has a greater chance to increase their income and welfare. In contrast, workers in the

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 319 traditional sector activity had lower levels of productivity with low wages. Sector wage productivity gap between modern and traditional sectors reflects the different levels of education (Hirsch & McPherson, 2003). Modern sector workers are more highly educated than the traditional sector workers. Literature Review Employment is an inseparable part of national development based on Pancasila and the Constitution of the Republic of Indonesia in 1945. Labors have has very important position as principal and national development goals. Labor rights set forth in the Indonesians labor law, which include the protection of labor is something that must be fought in order that the dignity of human labor and come up. Labor protections intended to guarantee the basic rights of employees with regard to the progress of the development of national and international business world. As defined in Section 28 D of the Constitution in 1945 that each person has the right to work and to earn rewards and fair treatment, also decent working relationship. Employees in the company are usually defined as workers who have structured positions (Parson, 1980). They work under the command of the managers or supervisors. Generally, they are being educated and high (Hazan & Maoz, 2001). Despite its position in the decision-making was not great, they dominate the largest number of employees in the organization (Keith & McWilliams, 1995). Mostly because they are structurally in a weak position, an employee at a company forms an informal group or union to defend their interests. When they are united, they will be very sensitive (Juhn & Murphy, 1997). Labor is one of the instruments in national development (Smith & Ward, 1985). Labor has a role and very important position as one of the perpetrators of the components to achieve the development goals ((Levine, 1993). Thus, they need for the protection of their rights. Talking about employee rights means talking about human rights related to basic needs. According to Sudjana, the minimum basic needs are: 1. Basic necessities of life, including food, clothing, shelter, water, air, fuel and others. 2. Needs to support and enhance the capacity of public welfare or individual productivity include the education, health services, communication and transportation. 3. Needs to improve access (opportunity to earn something) on production methods and economic opportunities, comprise of ground water, vegetation, capital (including technology), work opportunities and a decent income. 4. Needs to live with a sense of security and freedom to make decisions, participation in the political, social security and social defense. Employment concept divides the population into two groups, namely the working age population and non-working age population. Employment concept can be illustrated by the following:

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 320 a. Working-Age Population Working-Age Population is the population aged 15 years and above, in accordance with the provisions of the Labor Law. b. Non Working-Age Population Non Working-Age Population is the population under the age of 15 years. c. Labor force Labor force is the working-age population (15 years and over) is employed and unemployed. d. Non- Work Force Non-Labor Force is the working-age population who does not have the reference period/economic activity, either because of school, taking care of household or other (retired, transferee/submission, receiving deposits/bank interest, retirement or other reasons). e. Work Work is an activity that must be done with the intention of obtaining a job or help to earn income or profit for at least one hour a week ago. The hour-long work to be done in a row and not lost. This includes work activities, whether they are working or having a job but in the past week while off work, eg due to leave, sickness and the like. In some countries, the concept of work is based on habit (Gainful Worker Concept). This concept determines whether a person is working or not by habit (usual activity). This concept does not use a certain time limit f. Unemployment There are two definitions of unemployment. Those are broad definition and standard definition (relaxed). Standard definition of unemployment that includes people who are not working but looking for work/preparing a business. While the broad definition of unemployment includes people who are not actively looking for work but are willing/ready to work. Since 2001, the definition of unemployment used by Sakernas is broad definition, so the unemployment includes four criteria: looking for a job, preparing a business, despair/find it impossible to get a job (discouraged worker) and was accepted to work but have not started working. Central Bureau of Statistics (2010) shows clearly that there are only 2.6 percent of the labor force who graduate from college and there are some that only 75 percent of junior high school education down. For outside investors who want to invest in Indonesia, data presentation will present the notion that this type of potential industrial development in Indonesians is kind of labor-intensive manufacturing industries (garment, textiles, footwear, electronics). Because the situation of abundant labor supply (over supply), low education, and low wages, just kind of light manufacturing industries are suitable in business although investors still must pay job training, but the cost is not as capital intensive industry types (Chiswick & Miller., 1995). Labor (man power) as the entire population is considered to have the potential to be productive (Adioetomo, 2010). According Adioetomo (2010), there are two proposed improvements in this concept namely:

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 321 1. Activity Concept that is included in the labor force (labor force) should be someone who is actively working or actively looking for work. 2. Activities are carried out within a certain time limit before the interview. In other words, the concept of the labor force generally accompanied by a time reference. Based on this concept, the labor force (labor force) is divided into two, namely: a. Work b. Looking for work, which can be distinguished between: (1) Looking for work, but had never worked before (2) Finding job for the first time Result and Discussion Based on data collected, several conclusions can be drawn: 1. Obtained from the comparison of the tables of the workforce by age 15 years and above, it can be seen that the three countries have increased over the last 3 years ie 2010, 2011 and 2012. 2010 2011 2012 Indonesia 107.410.000 111.280.000 112.800.000 Malaysia 12.202.600 12.405.600 12.600.600 Singapura 1.678.400 1.699.100 1.727.900 Source: Badan Pusat Statistik, Department of Statistics Malaysia, Ministry of power Singapore From the data presented above, we can see an increase per year for 3 years. This is in line with the development needs of the labor market is increasing every year. This phenomenon indicates that the labor market is growing not only in Indonesia alone, but also equally to other countries in the ASEAN region, represented by Malaysia and Singapore. 2. Unemployment data by age 15 years and older that occurred in 3 countries in 3 consecutive years are presented below: 2010 2011 2012 Indonesia 7.410.000 6.800.000 6.320.000 Malaysia 396.600 399.300 434.100 Singapura 13.700 12.200 12.600 Source: Badan Pusat Statistik, Department of Statistics Malaysia, Ministry of Manpower Singapore

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 322 Based on the data presented unemployed from the age of 15, can be seen the growth of unemployment in Indonesia is quite significant. The average decline in the unemployment rate is 500,000 per year. This had a positive impact for Indonesia's labor absorbed quite effectively in the labor market in the last 3 years. It is also the case of Singapore seen the growth of unemployment in the country. Although the year 2012 has increased, it is not comparable to the decline in the unemployment rate from 2010 to 2011. The decline in unemployment is not the case in the last 3 years in Malaysia. Based on data released by the Department of Statistics Malaysia, in the last 3 years it has increased unemployment lift. Ranging from 2010 to 2012, the unemployment rate in Malaysia continues to grow. Evaluation needs to be done to reduce unemployment that is increasing each year. 3. Data labor recruiters and Singapore in the last 3 years: 2010 2011 2012 Employers 104.400 108.200 123.300 Employees 1.678.400 1.699.100 1.727.900 Source: Ministry of Manpower Singapore From the data released by the Ministry of Manpower Singapore showed that levels increased labor recruiters in 3 consecutive years. This had a positive impact to the availability of more jobs for job seekers. Independence in creating job opportunities and how Singapore has the bargaining power in the existing labor market. 4. Data distribution of employment by industry in Singapore and age Industry 15-29 30-49 >50 Manufacturing 33.200 174.900 84.200 Service 339.000 771.400 473.000 Retail 47.300 156.300 96.900 Public administration & Education 105.500 111.700 49.100 Source: Ministry of Manpower Singapore From the published data it can be seen that the dominant sector in the distribution of the labor force is the service sector. The whole total of 1.5833 million sectors is able to absorb labor. This is because Singapore is a country that does not have too large area to be used as the manufacturing industry and the manufacturing sector so that services are more dominant when viewed from the statistical figures presented. Public administration and education sector is also a concern. Singapore is known to have

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 323 high levels of quality of education is quite high when compared to other countries in the ASEAN region. This then encourages the Singapore government to prioritize education and public administration sectors. The figure presents statistics total 266,300. 5. Data emancipation gender distribution of the labor force in Singapore Employment Status 2010 2011 2012 Males Employers Employees Females Employers Employees 78.000 904.100 26.400 774.300 Source: Ministry of Manpower Singapore 79.000 910.800 29.200 788.300 89.600 922.600 33.700 805.400 From the statistical data presentation can be seen in the distribution of the labor force over the issue of emancipation of gender equality in the world of work is quite balanced in Singapore. In the last 3 years, from 2010 to 2012, the female labor force has increased both as a labor and employment provider. Initially in 2010 26.400 employers and 774,300 workers, gradually increased to 33,700 employers and 805,400 women workers in 2012. It is very positive and needs to be appreciated by considering Singapore is one of the developed countries in the ASEAN region. Singapore's economic progress and stability is also a positive impact for women Singapore to get more chances in an effort to develop a career and business. At the position of female labor force employers is still far adrift from the men. This is not a major issue differences margin figure, but more that Singaporean women are capable enough to be independent and self-sufficient to become entrepreneurs who can create jobs for others. Encouragement, support and incentives from the government to businesses need to be maintained in order to keep the business competitive climate in a positive trend. Education, socialization and the role of the foundation technologies need to be considered to optimize the job opening. Women as part of Singapore society was aware of this so those three things need to synergize efforts to support them. 6. Malaysia's labor force data by sex Labour Force 2010 2011 2012 Male 9.270.000 9.413.000 9.623.000 Female 3.091.000 3.233.000 3.301.000 Source: Prime Minister s Department Malaysia

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 324 From the statistical data released, the workforce can be seen comparisons between men and women in Malaysia. As statistical data on other countries, the workforce is still dominated by men, it is also happening in Malaysia. Malaysia is one of the developing countries which showed positive trends in economic development and a variety of other sectors. With the participation of women to be part of the labor force is significant then it could be expected that the balance of the division of labor in some sectors and certainly not ignore the rights of workers. 7. Data distribution of the labor force by industry Malaysia Industry 2010 2011 2012 Agriculture 1.386.800 1.384.000 1.389.100 Service 6.372.500 6.552.600 6.708.000 Manufacture 3.383.500 3.502.900 3.604.300 Mining 47.400 36.700 37.500 Source: Prime Minister s Department Malaysia From the statistical data released by the distribution level is known to be the dominant labor force in the service sector (service). Then, it is the second largest manufacturing sector. Malaysia as one of the ASEAN countries that is growing quite rapidly in the manufacturing sector in recent years becomes a magnet for prospective workers to join the sector. Synergy with manufacturing, services go hand in hand with manufacturing being one of the main milestones in the Malaysia labor force bases. Land area is still quite broad, making agriculture not simply abandoned. With the figures presented can be seen that the agricultural sector in Malaysia is still the main attraction and absorb the labor force. 8. Data distribution of the labor force by employment sector Employment 2010 2011 2012 Agriculture 41.490.000 39.330.000 41.200.000 Industry 13.820.000 14.540.000 14.210.000 Trade 22.490.000 23.400.000 24.020.000 Social Service 15.960.000 16.650.000 17.370.000 Transportation, warehousing, & 5.620.000 5.080.000 5.200.000 communications Source: Badan Pusat Statistik From the published data it can be seen that the structure of employment has not changed until 2012, where the agricultural sector, trade, service, social, and industrial sectors respectively are still the biggest contributor of employment in Indonesia.

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 325 When compared with the situation in 2011, the working population has increased especially in the agricultural sector by 1.9 million people (4.75%), social services sector amounted to 720 thousand people (4.32%), and trade around 620 thousand people (2.65%). Meanwhile, the sector is the industrial sector decreased by 330 thousand people (2.27%). Agriculture being the largest sector of employment in Indonesia because it is associated with an area of land in the Indonesian archipelago is still large enough to be used as farmland. The dominance of the agricultural sector in Indonesia is not without potential problems. By looking at the data that the agricultural sector is the largest sector employment, things should be examined in relation to the welfare of the farmers, peasant background and applied technology in agriculture Indonesia. Besides agriculture, Indonesia is known as a trade gateway that is strategic enough to sink the trade sector workforce ranks second. It is considering a broad range of widely Indonesia to become one barometer of world trade. Globalization and dynamic era of free trade trade sector make it one of the vital sectors for the country of Indonesia. 9. Data workers by major occupational status Main Employment Status 2010 2011 2012 Make one's way 21.030.000 19.410.000 19.540.000 Employer assisted by temporary 21.680.000 19.660.000 20.370.000 workers Employer assisted by permanent 3.260.000 3.720.000 3.930.000 workers Labor / Employee 32.520.000 37.770.000 38.130.000 Casual employee in agriculture 5.820.000 5.480.000 5.360.000 Free workers in nonagricultural 5.130.000 5.640.000 5.970.000 Family workers / unpaid 18.770.000 17.990.000 19.500.000 Source: Badan Pusat Statistik The simple formal and informal activities of the working population can be identified based on employment status. Of the seven major categories of employment status, formal workers trying to help cover categories and categories of workers still labor/employee, the rest include informal workers. Based on this identification, then in 2012 about 42.1 million people (37.29%) worked in the formal activities and 70.7 million people (62.71%) work in informal activities. In the last year (2011-2012), working with the state trying to help workers keep increasing 340 thousand people and the labor status of workers/employees increased by 3.6 million people. This increase brought the total number of formal workers increase of 4 million people and a percentage of formal workers rose from 34.24% in year 2011 to 37.29% in 2012.

Southeast Asian Journal of Social and Political Issues, Vol. 1, No. 3, March 2013 326 The components consist of informal workers to the status of workers on their own, trying to temporary laborers, workers in agriculture, free trade in non-agricultural workers and family/unpaid. In the last year (2011-2012), informal workers declined by 2.4 million people, and the percentage of informal workers was reduced from 65.76% in 2011 to 62.71% in 2012. This decline came from nearly all components of informal workers, except for workers in non-agricultural free. 10. Workforce data by education Highest Educational Attainment 2010 2011 2012 Elementary (Low Educated) 54.510.000 55.120.000 55.510.000 Junior High School 20.630.000 20.700.000 20.290.000 High School 15.920.000 17.110.000 17.200.000 Vocational School 8.880.000 8.860.000 9.430.000 Diploma I/II/III 3.020.000 3.170.000 3.120.000 University 5.250.000 5.650.000 7.250.000 Source: Badan Pusat Statistik From the published data it can be seen that the absorption of labor by 2012 is still dominated by low-educated workers are primary to the 55.5 million people (49.21%) and junior high school at 20.3 million (17.99%). College-educated workers only about 10.3 million people include 3.1 jut people (2.77%) education diploma and 7.2 million (6.43%) university educated. Improving the quality of workers is shown by the declining trend of less educated workers (SMP down) and increased high-educated workers (diploma and university). In the past year, less educated workers declined from 76.3 million people (68.60%) in 2011 to 75.8 million people (67.20%) in 2012. Meanwhile, college-educated workers increased from 8.9 million people (7.96%) in 2011 to 10.3 million (9.19%) in 2012. References Adioetomo, Sri Murtiningsih. 2010. Dasar-dasar Demografi. Salemba Empat. Jakarta. Chiswick, B., R. & Miller, P., W. 1995. The Endogenity Between Language and Earnings: International Analysis. Journal of Labor Economics, vol. 13, no. 4, pp.246-288 Hazan, M. & Maoz, Y., D. 2001. Women s Labor Force Participation and The Dynamics of Tradition. Economic Letter, no. 75, pp. 193-198

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