THE UNEMPLOYMENT AND POVERTY IN INDONESIA

PAPER
TO FULFILL THE DUTIES OF SUBJECTS
English profession
Which is taught by Ms. Vira Yohana

by
Alfia Yunita Sari Putri
Dian Maharani Putri
Hasan Ashari
Siti Maimunah
Sulistyami

130422605299
130422605260
130422605254
130422605230
130422605227

STATE UNIVERSITY OF MALANG

FACULTY OF ECONOMICS
DEPARTMENT OF ACCOUNTING
October 2013

INTRODUCTION
A. BACKGROUND OF THE STUDY
A country can never be separated from the wide range of problems related
to its citizens, especially on the country that has a high population as Indonesia.
Problems of unemployment and poverty in Indonesia have become a major
problem in this nation and need the right solutions to solve them.
Unemployment and poverty are two of many of the existing economic
problems in the country. Unemployment exists because the population is not
balance with the land to seek work. However, many things that make people
unemployed even though there have been many ways that is done to address them.
Thus poverty emerged as its effects. But when the poverty is discussed what is
meant is the poverty of the material. With this sense, then someone included in the
category of poor if they not able to fulfill minimum standards of basic needs in
order to live a manner deserving.
Based on explanation above, our primary goal is to explain about the
problem of unemployment and poverty faced by Indonesia and gives the solution
and explains the link between unemployment and poverty and also that effect.
B. RESEACH QUESTION
Based on the background above could be formulated several problems as
follows.
1.
2.
3.
4.

What are the causes of unemployment and poverty in Indonesia?

Is there a link between unemployment and poverty?
What are the impacts from both of those problems?
How is the solution to solve both of those problems?

FINDING AND DISCUSSIONS

Unemployment is people aged 15 to 64 years who are looking for a job

and have not get it. Unemployment is often a problem in the economy because of
the existence of unemployment, productivity and people's income will be reduced
so that it can cause the poverty and other social problems. While the poverty is the
inability to fulfill the basic needs such as food, clothing and shelter.
A. THE CAUSES OF UNEMPLOYMENT AND POVERTY
1. The common factor
In general, the unemployment caused by the amount of the labor force or
job seekers is not proportional to the number of existing jobs that can absorb it.
2. The special factors
2.1. Frictional unemployment
Frictional unemployment is unemployment that occurs because of a
mismatch between job applicants with the requirements demanded. For example,
the displacement labor of agriculture to manufacturing or industry for a temporary
make them being unemployed, make a decision to find a new work better than
before.
2.2. Conjunctural unemployment
Conjunctural unemployment is an unemployment caused by fluctuation
of the economic life or the economic cycle. For example, a company when being
advanced, need labor new to business extension for the expansion effort.
Otherwise, when their business continues to lose money then there will be layoffs
(termination of employment relationships) or dismissal.
2.3. Structural unemployment
Structural unemployment is an unemployment caused by changes in the
economic structure and economic patterns in the long term. For example, a region
that was an agrarian (agricultural) became an industrial area, making agricultural
workers will be unemployed.

2.4. Seasonal unemployment

Seasonal unemployment is an unemployment that occurs because of the
changing of the seasons. For example, during the harvest season, farmers work
hard, while previously many of them are unemployed.
2.5. Cyclical unemployment

Cyclical unemployment is unemployment due to the impact of the

economic cycles up and down so make the demand for labor is lower than the
jobs offers.
2.6. Technological unemployment
Technological unemployment is an unemployment that occurs due to a
replacement of human labor with machines. Example, before there was a rice
miller, someone works as a rice pounder by them but after there is a new
invention to do that, rice-milling machine, their job is replaced by the machine.
2.7. Deflasioner unemployment
Deflasioner unemployment due to the amount of labor exceeds
employment opportunities.
In addition, unemployment occurs due to limited absorption of human
resources (HR). An observer labor from Serang, Darlaini Nasution SE said that
there were three fundamental factors that caused high unemployment rate in
Indonesia. All three of these factors is mismatching results achieved between
education and employment, an imbalancing of demand and supply of human
resources and the quality of the resulting human resources is still low. The other
cause is the quality of human resources is in itself incompatible with the expected
in the field, due to the creation of human resources by the College has not been
sufficient, or has not reached the standards set.
The existence of unemployment resulted in the incidence of poverty
because of the lack of income issue causing someone hard to fulfill their
necessity, especially the basic needs, such as clothing, food and shelter. Beside
that, poverty arises due to low levels of education are taken by someone. For
example, people who have a history of education only a primary level (elementary
school) will be difficult to get a job. Eeven if they work, they will receive little
salary.
B. RELATIONSHIP BETWEEN UNEMPLOYMENT AND POVERTY
Unemployment and poverty are two things that have quite closely links. A
condition where a person is unemployed push to create poverty because of a
limitation. People who don't have jobs certainly have no income. In fact a family
must have need, especially basic needs such as clothes, food and shelter.
However, if the head of the family has no income, how these basic needs can be

fulfilling? Here's condition said to be poor, that is the inability of families to fulfill
their minimum necessities. So we can conclude that the number of high
unemployment in the country will certainly increase the number of existing
poverty. This is why the problem of unemployment is so scary, especially in
developing countries like Indonesia, because unemployment has a broad impact
on our country.
C. THE IMPACT OF UNEMPLOYMENT AND POVERTY
High rates of unemployment in an economy will lead to a recession and a
drop in the level of welfare of society because of a decrease in revenue of the
society. Here are the impacts of unemployment and poverty.
1. A decline in income per capita.
If the unemployment rate is high, then the income per capita will decline
and then if the unemployment rate is low, then income per capita will increase.
2. A decrease in government revenue derived from the tax sector.
A person who works get returns in the form of a salary or wages. Before
the salary or wages is in the hands of a receiver, it gets a tax cut first. This tax is
one source of income so if there are not many people work, the income from the
state income tax revenues will tend to decrease.
3. Psychological burden.
The longer someone is unemployed the greater the psychological burden
that is borne. Someone who doesn't have a job in a prolonged period of time will
feel inferior (minder) because its status is not clear.
4. The emergence of social cost.
The high level of unemployment will lead to spending in the form of social
costs such as the cost of counseling, training costs and security costs because of
the increasing trend of crime.
5. Lost the ability skill.
Being unemployed for long periods will cause the level of workers skills
become declining.
6. Poverty
Someone who doesnt work and have no income feel difficult to fulfill
their necessities. It can cause social problems such as theft or other violent. It
hapenned because someone is no longer able to earn a living through the right
and lawful. When there are no more guarantees for a person can survive and
maintain the sustainability of life then the shortcuts was made, like robbed, steal
or cheat. Besides that, the expensive cost of education, make the poor could not

reach school or education because for one meal a day they had difficulties. This
conditions make the poor worse. The high level of dropout of school, impact on
low levels of education of the person. Therefore, that will reduce the chances of
someone getting a better job. This will lead to increase the unemployment due to
not being able to compete in the era of globalization that demands skills in all
areas.
D. SOLUTIONS TO OVERCOME UNEMPLOYMENT AND POVERTY
How to overcome the unemployment generally
1. Improve the quality of education
2. Improved exercise of work (vocational training) appropriate skills to fulfill the
needs of modern industry demands
3. Increase and encourage entrepreneurship
4. Encourages opportunitie of informal efforts to enhance the development of labor
intensive system
5. Open up employment opportunities abroad
How to overcome the unemployment spesifically
1. How to Overcome Structural Unemployment
1.1.
Increase the capital and labor mobility
1.2.
Immediately move the surplus labor from places and sectors that
are excess to the economic sector to another places and sectors that lack of
it
1.3.

Conduct training to fill out an opportunity jobs or work which is

empty

1.4.

Set up a labor-intensive industry in the region that experiencing

unemployment
2. How to Overcome Frictional Unemployment
2.1.
Expansion of employment opportunities by means of setting up
new industries, especially labor-intensive
Promote the development of the informal sector, such as a home

2.2.

industry.
2.3.
Promote the transmigration program to create jobs in other sectors
agraris and the formal sector
The opening of public projects by the government, such as the

2.4.

construction of bridges, highways, PLTU and others, so they can absorb

the workforce directly and to stimulate new investment from the private
sector.
3. How to Overcome Seasonal Unemployment
3.1.
Share the information quickly if there are jobs in other sectors

3.2.

Conduct training of other skills while waiting for a particular

season.
4. How to Overcome Unemployment Cycle
4.1.
Directing people request on goods and services
4.2.
Increase the purchasing power
5. How to Overcome Unemployment Conjunctural
5.1.
Increase the purchasing power so the market become crowded and
will increase the number of requests
5.2.
Not to set too high the bank interest so that investors prefer to
invest their money
6. How to Overcome The Deflationary Unemployment
6.1.
Training of the labor
6.2.
Attract new investors
7. How to Overcome Technological Unemployment
7.1.
Preparing communities to be able to follow the development of the
technology with how to enter the training curriculum materials technology
in schools
7.2.
Training educators to be the master of technology
In accordance with the statement of the UUD45, section 27 clauses 2 that
every citizen has the right to a job and a decent livelihood for humanity so here
are presented various strategies and policies that the government can be done.
1. The Government provides help insight, knowledge and entrepreneurship skills to
the Small and Medium Enterprises (SMEs) in the form of technical guidance and
management, provides capital assistance to long-term and market expansion and
provision of special facilities to grow independently and create new compete in its
field. It also to encourage the formation of joint ventures and business
environments that support and encourage the attainment of small and medium
entrepreneurs who are able to develop the business.
2. Make improvements, construction and development of the region, especially areas
that left behind and isolated as a priority by building facilities of transportation
and communication. This would open up jobs for the unemployed in various types
and levels. Therefore, the potential of the regions of our country -potential in
natural resources and human resources- will be develop.
3. Build social institutions that can guarantee the lives of the unemployed, like a PT
Jamsostek (Social Security Work Force). By building this institution, any
unemployed in Indonesia will response well and gets special attention.

4. Simplify licensing and increased security investments both foreign investment and
investing in the country. It needs to be simplified to stimulate the growth of a
conducive investment climate to create jobs.
5. Develop the tourism and culture sectors of Indonesia (especially in areas of
untapped potentially) and doing promotion to other countries to attract foreign
tourists and invited investors to participate in the construction and development of
tourism and culture that would absorb many of the local workforce.
6. Conduct synergy among the state programs or private enterprises that have a
business relationship with each other to fulfill the necessities. The synergy will be
more efficient and cheaper the activities of the production process because the
procurement of raw materials can be done together. Example, PT Krakatau Steel
can synergize with PT. PAL Indonesia to supply raw materials such as steel plate.
For example, PT Krakatau Steel can synergize with PT. PAL Indonesia to supply
the needs of raw materials in the form of a steel plate.
7. By slowing the rate of population growth (minimize married at an early age) can
reduce the rate of growth of the labor force or launch a new resettlement system
by allocating population dense to sparsely populated areas with facilitated estates,
agriculture or animal husbandry by the government.
8. Improve the national education system and curriculum. The education system and
curriculum largely determine the quality of education that is oriented towards
competence. Because most of the unemployed are college graduates who are not
ready to face the world of work.
How to cope the unemployment and poverty are almost the same because
how to resolve of the unemployment created not only reduces the unemployment
rate but also to increase people's income. It can conclude that the reduction in the
number of unemployed is directly proportional to the reduction of poverty. If
unemployment rate is high, then poverty rate will also high. If unemployment rate
is low, then poverty rate will also low.
Unemployment exists because the population increases rapidly at any time
with no balance with the land to seek work. Please note that the unemployment
problems are multi-dimensional so that requires a multidimensional resolution
too. Actually, unemployment couldnt be eliminated in the economy of a country
but it can be prevented or minimized. However, we should not depend on our
government to solve the problem. But we should reflect on ourselves to overcome

those unemployed to improve our quality of life. Nevertheless, in the

implementation need cooperation between the society and the government to
achieve the purpose alleviating of unemployment and poverty to create prosperity
of Indonesian people.

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