The Indonesian labor force is estimated at about 95 million, two-thirds of which is between the ages of 15 and 34, and two-fifths of which is made up of women. Even during the period of significant GDP growth from 1985 to 1995, the rise in employment failed to keep up with the rise in population. More than 4 million people (nearly 5 percent of the labor force) were looking for jobs even before the crisis of 1997. The government's August 1999 Labor Force Survey found 6 million people over age 15 unemployed, and a much higher number under-employed (34 million workers, or 39 percent), working less than 35 hours a week in 1998. Some economists question the reliability of these figures, and suggest that more than half the population is underemployed.
In 1998, the labor force was distributed approximately as follows: agriculture (45 percent); trade, restaurant, and hotel (19 percent); manufacturing (11 percent); transport and communications (5 percent); and construction (4 percent). The manufacturing workforce is skilled in the basics but undereducated. While many light manufacturing companies, such as sneakers and clothing plants, opened factories in Indonesia to take advantage of a mostly young, female labor pool of migrants to the cities, high-tech manufacturers have been slow to move in. As competition increases from China, Vietnam, and India, these unskilled workers are starting to lose out. There have been well-documented charges of sweatshop conditions (forced overtime, unsafe workplaces, and inadequate pay) in many of these export-oriented factories.
The government sets minimum wages in each region; in Jakarta it was set at Rp286,000 (US$33) per month in April 2000. While workers were allowed to join a single union established by the government under the Suharto regime, new regulations put forth in 1998 have allowed the formation of more than 2 dozen new labor unions. Strikes have increased in recent years, with the return of economic activity. According to the International Labor Organization, "women are likely to be more adversely affected by the [economic] crisis than men. They are concentrated in the most precarious forms of wage employment and are thus more vulnerable to lay-offs."
Indonesia has also traditionally sent large numbers of workers overseas, both legally and illegally. As countries such as Malaysia and Thailand suffered the effects of the crisis, nearly all of these Indonesian workers were sent home, worsening the problems of unemployment and poverty.