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Indonesia’s unemployment rate surged to the highest level since 2011, as the pandemic causes 29 million people to lose their jobs or move to part-time work.

The jobless rate rose to 7.07% as of August, from 5.23% a year ago and marking its highest level since the 7.48% seen in 2011, according to the nation’s statistics agency. The number of people without work expanded by more than a third to 9.8 million as the pandemic pushes Southeast Asia’s largest economy into its first technical recession in two decades.

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Overall the pandemic has impacted 29 million Indonesians, or close to 15% of its labor force. On top of those who lost their jobs, about 9.5 million exited full-time employment, while those working fewer than 35 hours a week increased by 9.2 million.

President Joko Widodo’s government has rushed the passage of an omnibus law that relaxes labor rules and slashes red tape in a bid to encourage job creation and position the economy for a turnaround in 2021. While the move has been welcomed by business groups, workers and activists continue to protest against it saying the changes would erode labor rights. A labor union has filed a judicial review to challenge the law.

Other Highlights

  • Jakarta suffered the worst unemployment rate at 10.95%, followed by surrounding provinces Banten at 10.64% and West Java at 10.46% as they bore the brunt of lockdown measures
  • The informal sector expanded to 60.5% of total workers as of August from 55.9% the year before, as more people take up unpaid work for their families
  • Women’s participation in the labor force gained slightly to 53.13%, from 51.81%, while men’s role eased to 82.41%, from 83.25% -- though the statistics office didn’t specify whether this reflects those working for their families without pay

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