Pandemic forces more Indonesian workers into low-paying service jobs

As factories lay off workers due to the pandemic-induced economic downturn, more Indonesians are getting into service sector jobs.
By: | March 9, 2022

Most of these furloughed workers ended up in sectors such as agriculture and services.

A contributing factor could be that the majority of service-sector workers have less than vocational or college education, except for those in the education sector. For example, in accommodation and food services, 37.7% of workers had only high school education and 34.1% had elementary school education or lower.

In contrast, most workers in modern service sectors, such as information and communication, financial and insurance and real estate activities, had at least senior high school education.

Sectors such as wholesale and retail trade, accommodation and food service activities and transportation and storage, employed the bulk of the workforce in services in August 2021, according to the latest data from Statistics Indonesia (BPS).

This contrasts with developed economies where industries such as health, education, finance, business services and IT employ larger sections of the workforce.

READ: Indonesia expected to create 20 to 45 million jobs through digitalisation

Nearly 40% of the service workforce, or over 25.7 million Indonesians, work in the wholesale and retail trade. Workers in accommodation and food services formed the next largest subgroup at 14.2%, according to the Jakarta Post.