Jakarta, Indonesia Sentinel — The unemployment rate among Indonesia’s Gen Z has reached an alarming level. The Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI), has called on the Indonesian government to formulate effective policies to tackle the rising unemployment rate among Generation Z.
According to data from the 2023 National Labor Force Survey (Sakernas) from the national statistic agency (BPS), the open unemployment rate (TPT) for Gen Z stands at 9.37%, or approximately 4.84 million people, significantly higher than the national average.
“This figure indicates that nearly one in ten Gen Z workers is currently unemployed,” the LPEM FEB UI noted in a report on Saturday (October 5, 2024), citing from Bisnis.com.
The high unemployment rate among Gen Z is attributed to several factors, including a mismatch between skills and industry demands, lack of work experience, and challenges in finding jobs that align with their aspirations and educational backgrounds.
The data also revealed that 3.04% of the Gen Z population falls under the NEET (Not in Education, Employment, or Training) category, representing around 2.15 million individuals at risk of being marginalized from the workforce. While the percentage is relatively small, LPEM warns that the NEET group faces greater challenges in adapting to changes in the job market and reintegrating into the labor force.
The study further highlighted that the highest unemployment rate among Gen Z is found among high school graduates with 36.17%, followed by vocational school at 29.60%. This demonstrates that secondary education graduates face significant obstacles in entering the workforce, a trend supported by reports from the Central Statistics Agency (BPS).
Many graduates lack the practical skills demanded by industries, despite vocational schools being designed to produce job-ready graduates. However, many students feel underprepared due to a mismatch between their chosen fields and market needs or insufficient hands-on experience.
On the other hand, 11.64% of unemployed Gen Z are college graduates. Despite their higher level of education, these individuals often encounter fierce competition in the job market, high salary expectations, and a lack of practical experience or in-demand skills.
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LPEM also pointed to an alarming trend in which 1.47% of the Gen Z population or around 600,000 people have become discouraged with their job prospects. These individuals are no longer actively seeking employment, believing their chances of securing a job are slim. Common reasons include lack of experience, skills mismatches, and age-related biases from potential employers. This situation reflects broader structural barriers and negative perceptions that hinder some individuals from successfully entering the workforce.
LPEM concluded that Gen Z unemployment is a complex, multi-layered issue that requires a multifaceted approach. “A strategy focused on expanding employment opportunities, improving skills, and opening access to new sectors is essential to ensure that the potential of Gen Z can be fully harnessed across Indonesia,” the report emphasized.
(Raidi/Agung)
