Indonesia's Growing Unemployment Crisis: Challenges and Implications

Gen Z Unemployment Statistics

The current unemployment situation in Indonesia reveals a concerning trend, particularly affecting the younger generation. Gen Z, defined as individuals between 15 and 29 years old, constitutes 67% of the total unemployed population, amounting to approximately 4.9 million people ¹

. This demographic represents the most productive age group, making this statistic particularly alarming. The high unemployment rate among Gen Z indicates a significant mismatch between the available workforce and the job market's capacity to absorb it.

Increasing Job Market Competition

The job market has become increasingly competitive in recent years. According to Shinta Kamdani, Chair of APINDO, the competition for available positions has intensified dramatically. Before the COVID-19 pandemic, one job opening was typically contested by two job seekers. However, this number has risen significantly, with 8 to 16 individuals competing for a single position in 2022-2023 ²

. This surge in competition highlights the growing challenge of creating sufficient formal employment opportunities to meet the demands of the expanding workforce.

Rising Layoffs Across Industries

The employment landscape is further strained by an increase in layoffs. Recent data from the Ministry of Manpower (Kemnaker) reveals that 70,244 workers were laid off between January and October 2025 ⁴

. This figure represents workers who were registered under the Job Loss Insurance program managed by BPJS Ketenagakerjaan. The rising trend in layoffs contributes to the growing unemployment numbers, adding to the overall economic pressure.

Regional Impact of Layoffs

The layoffs are not evenly distributed across the country. West Java emerges as the region most affected, accounting for 22.29% of total layoffs, with 15,657 workers losing their jobs during the same period ³

. This regional concentration of layoffs suggests that certain areas may require targeted interventions to mitigate the impact on local economies and job markets.

Economic and Social Implications

The combination of high unemployment among Gen Z, intensifying job competition, and rising layoffs paints a challenging picture for Indonesia's labor market. The shift towards informal employment, as highlighted by Shinta Kamdani, indicates a potential long-term impact on job quality and economic stability ¹

. The government and private sector may need to collaborate on strategies to create more formal job opportunities and address the underlying issues contributing to this unemployment crisis.