Bali’s Unemployment Solution: Blame the Unemployed

In what visitors consider some of the most idyllic places in Indonesia, unemployment isn’t the problem the unemployed are the problem. If you have a college degree and are unemployed you are an “elitist” who will refuse any job involving a “unpleasant odor,” according to Bali governor Made Mangku Pastika, who is also a colonel in the General Police.

He asserts that college graduates just want government jobs, which is an interesting claim form this life-long military and police officer. From Bali Discovery News:

I Made Mangku Pastika

Bali governor I Made Mangku Pastika, speaking at a public forum held at the Bali House of Representatives (DPRD-Bali) on Saturday, 26 November 2011, depicted joblessness in Bali as “unemployment of the elite class.”

This elite class of unemployed, according to the Governor quoted in Beritabali.com, is dominated by people holding college degrees.

Pastika blamed the high rate of joblessness among graduates on a desire to obtain employment as civil servants. In addition, the governor says college grads in Bali are much too selective in their search for employment.

Pastika accused new graduates of confusion in selecting a first job and cited an educational system the produces thousands of degree-holders of indeterminate quality.

Asked Pastika: “Do they want to work as a taxi driver, or temporarily as a hairdresser, or even taking care of cattle? It’s unsure they would take such a job. A sniff of an unpleasant odor and they’re already feeling faint.”

Pastika used the occasion to repeat a favorite refrain that college graduates must be prepared to create work opportunities for themselves and not only look for job vacancies.

Data from the provincial government of Bali estimates there are 65,000 unemployed people in Bali, 5% of which are college graduates.

Translation of Bali’s governor”s quote from BeritaBali.com:

“Why? Thorough job she chooses what, now is also the problem of our education, we produce every day scholars, but what kind of quality, would not he work as a taxi driver for example, would not he be a barber for a while, or keep a cow, not necessarily like, smell the manure alone was a headache to him.” 

According to the Asian Development Bank’s December 2010 report on Indonesia:

Indonesia’s unemployment rate shrank from 11.2% in 2005 — the highest rate in the last 6 years — to 7.1% in August 2010. However, poverty remains challenging, with 13.3% of Indonesians living below the national
poverty line while the informal sector accounts for about 67% of the workforce.

Some background from Jeremy Kingsley of the Middle East Institute in Singapore:

Indonesia is the world’s third most populous democracy and the largest Muslim-majority nation. Its population of approximately 240 million people is spread across an archipelago of around 16,000 islands. Until 1998, this Southeast Asian nation experienced three decades of authoritarian rule under President Soeharto. The political demise of the Soeharto regime came after the Indonesian economy collapsed in the wake of the 1997 Asian economic crisis. This brought about a season of political discontent and protests similar to those we have been witnessing in Tahrir Square and elsewhere in the region.

While Indonesia is considered a successful case of democratic transition and, indeed, a model for these Middle Eastern states, it would be inaccurate to suggest that the transition has passed without problems.

Then there’s this interesting data from Indonesia’s Central Statistics Agency (BPS) reported by the Jakarta Post in December 2010:

According to agency data … of the 8.3 million unemployed people in Indonesia, university graduates account for 11.92% of total unemployment, while college graduates account for 12.78 percent.

Meanwhile, elementary school graduates’ share in the unemployment rate stands at only 3.81%, junior high school graduates (7.45%) and senior high school graduates (11.90%).

and..

Fifty-five percent of the workers are elementary school graduates, while only 6.25% of them
are university graduates, latest BPS data show.

There’s this assessment written in 2010 by Emmanuel Jimenez, writing on the World Bank East Asia & Pacific blog:

In countries like Thailand, Indonesia, and China, the percent of tertiary level graduates in the workforce is now about 20%, double from what it was 15 to 20 years ago.

At the same time, employers fret that they are not getting the skilled workers they need to compete in a global economy.  Investment climate assessments  report that 20% of employers feel that skills availabilities are a major impediment to business, as much as, if not more than, meeting onerous regulations.

Such employer frustrations must puzzle the many higher education graduates report having trouble getting jobs.   And some who get jobs are the first to lose them during economic downturns, as two of my nephews living on either side of the Pacific Ocean recently found out. Unemployment rates among tertiary graduates are as high as 10% in countries like Indonesia and The Philippines. As an unemployed 21-year old newly-minted Vietnamese BA groused in a recent consultation:  “I expected to find a job easily since I have a degree in computers. But, after going to multiple interviews, I found out that firms are hesitant to hire me because despite my degree, they have to train me to meet their work requirements. It is easier for these firms to hire a graduate with a couple of years of experience instead.”

What’s going on? Getting this puzzle sorted out may not only determine whether low-income countries can become middle-income countries and MICs, high-income countries.  They may also affect social stability as young people’s expectations are at an all-time high. It is thus not surprising that governments are considering investing a great deal of their national wealth on expanding and improving their higher education systems.

Jimenez then makes the following points which seem to support Bali’s governor statement although they were written nearly 18 months earlier (emphasis in the graphs above and blow is from the original source):

The high unemployment rate of graduates is due, not to their oversupply, but to the fact that too much of tertiary education in EAP is of low quality and has irrelevant curricula. Young people are learning the wrong things.  For example, employers are seeking ‘softer skills’ such as team-building and communications and technical skills such as computer familiarity.  This would argue that increased investment should focus on quality rather than just quantity.

H3: High unemployment may be due to the unrealistic expectations of graduates that they are entitled to ‘white collar’ jobs in offices and that ensure lifetime security. In contrast, in the US, the average college graduate will have had seven jobs in the first two years after graduation, and many of them in areas that are unrelated to their field of study or in what are seemingly menial jobs but which teach invaluable life skills.  Societies need to prepare the expectations of young people about labor market realities and about the need to get good basic experience early in their careers.

The difficulty in accurately matching skills taught in educational institutions with the demands of commerce is a near-global issue among businesses. The ability of education system to supply sufficient numbers of qualified graduates will almost always lag behind the needs of business as long as innovation and growth is taking place.

Managing the expectations of college graduates in this huge, yet still developing nation perhaps should become part of Indonesia’s educational system. Meanwhile politicians need to stop blaming the unemployed college graduates – the future of the nation and Bali – and instead find ways to enoucrage entreprenuerial among the young.