Official unemployment decline contrasts with rise in layoffs
Continued layoffs and a shift of work to the informal sector raises questions about the quality of jobs being created as official data shows that the unemployment rate edged down in May.
Official data reveals a slight decline in the unemployment rate in May 2026, despite a surge in layoffs across the country. Statistics Indonesia (BPS) recorded 7.22 million unemployed individuals, translating to an open unemployment rate of 4.65 percent, slightly lower than the 4.68 percent in February. The total number of unemployed people decreased by approximately 24,000 in May. The labor force expanded to 155.41 million, with 148.19 million employed, a rise of 522,000 from February.
Despite the headline improvement in employment, Indonesia continues to face significant challenges in its labor market. The ongoing layoffs and a shift towards informal work raise concerns about the quality of jobs being created. According to Manpower Ministry data, 43,805 workers were laid off and registered under the Job Loss Insurance (JKP) program during the first half of the year, with West Java accounting for 20.16 percent of the total.
The Indonesian Employers Association (Apindo) reported that at least 126,000 workers were laid off during the January-May period.
The majority of Indonesian workers remain outside the formal economy, where dismissals are rarely recorded in official statistics. This discrepancy highlights the need for a more comprehensive understanding of the labor market and the quality of jobs being created.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
