The Impact of Global Economic Crisis on the Job Market for Young Indonesian

Does the Global Economic Crisis Affect on Job Prospect for Young People in Indonesia?

Global economic crisis is a condition in which global economy is in downturn. The spending total (aggregate expenditure) decreases that makes consumption total (symbolizes as C in the national income equation, Y = C + I + G + X – M or National Income = Consumption + Investment + Government Expenditure + Export - Import) lower than before. It affects on the job market in all countries all over the world, including Indonesia although only a little bit, not as severe as the other western countries. During the current global economic crisis, Indonesia is one of the three countries that still record a positive economic growth. The other two countries are China and India. However, the effect of the global economic crisis to the job prospect for young people is felt in Indonesia, indirectly and softly.

Job prospect for young people in Indonesia is not really affected by the global economic crisis because of the micro-business that is widely spread in Indonesia. The micro-business includes clothe manufacturing, food production, and art collection. Indonesia has 18,933,701 micro-businesses accounting for 83.2 percent of the total number of enterprises which was recorded at 27,737,314. In 2006 The number of small-scale businesses was 3,594,254 or 15.8 percent, medium-scale businesses 152,789 or 0.7 percent, large businesses 44,038 or 0.2 percent and unclassified businesses 2,532 or 0.1 percent. The number of small-scale business (micro-business) was dominant. It is caused by continual support by Indonesian Government. (Central Bureau of Statistics, 2006).
The micro-business is highly supported by Indonesian Government in order to empower Indonesian society.   Indonesian Government make a lot of package of supporting policies pertinent to the growth of micro-business. Indonesian government increases the ease of finance source access for micro-business, strengthen the credit collateral...