Definition of the Labor Force – Population aged 15 to 64 years who are able to work if there is a demand for work is called the workforce. This work group is also known as the productive age group. The definition of the workforce itself is all people who can do work to produce goods or services, both to meet their own needs or the needs of the general public. This article will discuss in more detail the definition of the workforce, class, determinants, and others.
When talking about the workforce, it can be said that those who fall into that category are those who are still classified as being of productive age. Not only that, the workforce also consists of several working groups and also the unemployed. In the world of work itself, almost everything is interesting to discuss.
In Indonesia, there are still many people who have difficulty getting a job and it’s usually caused by many factors. Basically, the availability of jobs is not always in accordance with the large number of job seekers in one workforce. This happens because every year the workforce that will apply for jobs is always different.
Definition of Labor Force
According to the Big Indonesian Dictionary (KBBI), the workforce is the population whose age falls into the working age category, including those who are currently working or those who are looking for work. Referring to the previous explanation, all people who are in their productive period will be categorized as the workforce. This group also includes all conditions, both for those who have obtained work or those who are still unemployed or looking for work.
Meanwhile, according to the Financial Services Authority or OJK, the workforce is all people who have reached a certain age and have the ability to work, including people who are already active or who are currently still in the process of looking for work. In general, the generation is the designation for residents who are in productive age. In this case, the productive age of work can be interpreted as all people who are currently working, still looking for work, or have not yet found a job.
In Indonesia itself, what is meant by productive age includes the age level of the population who are able to work and earn their own income. Based on the provisions of the government, this productive age category is in the age range between 15 to 65 years. As for residents who are in the productive age range, but do not work or choose to be unemployed, they are not included in the labor force category.
Definition of the Work Force According to Experts
The following are some definitions of the workforce according to experts, including:
1. Definition of the Work Force According to Sumarsono (2009)
The labor force is the portion of the population that is able and willing to work. In this case, the meaning of the workforce is those who are physically, physically and also mentally capable and legally able and not lose their freedom in choosing and doing the work they do and are willing to be active or passive in doing and looking for work.
2. Definition of Workforce According to BPS (2010)
The labor force is the working age population who are working or looking for work. The approach itself includes a workforce that is actively working or looking for work in which both activities exist for a certain period of time. That way, this approach can distinguish between the work force which is divided into two groups working and looking for work.
3. Definition of the Workforce According to Law no. 2 of 1999 Article 2 Paragraph 2
The labor force is the population of working age or 15 years and over who are working or have a job. In other words, the notion of the workforce is the group of people of working age who are working or looking for work. Where the labor force is also called the productive age group.
4. Definition of the Work Force According to Law no. 13 of 2003
The labor force is everyone who can do work to produce goods or services, be it to meet their own needs or that of the community. The government also continues to strive to improve the quality of the workforce by buying people with skills. So that later they can enter the job market according to what they want.
5. Definition of the Work Force According to Prof. Soemitro Djojohadikusomo
The labor force is part of the population that has a job or is looking for work to do productive work.
6. Definition of the Work Force According to Soeroto
The labor force can be interpreted as part of the population who are of working age who have and do not have jobs, but are able in the sense that they are physically and mentally healthy and juridically do not lose their freedom to choose and also do work without any element of coercion.
7. Definition of the Work Force According to Payaman Simanjuntak
The labor force is the population aged 15 years and over and has a certain job in an economic activity and those who are not working but are looking for work.
Labor Force Participation Rate Factor
According to BPS, the Labor Force Participation Rate or often abbreviated as TPAK is a percentage of the number of the labor force to the population aged 10 years and over. TPAK itself can be supported by several factors. Here is a full explanation:
1. Population Age
The age element referred to in the labor force participation factor is that by age the population has entered the productive working age, namely at the age of 15 to 65 years and they will be referred to as the labor force.
2. Gender
The division of the labor force and non-labor force can be influenced not only by age, but also by the structure of the population based on gender. The more the composition of the male population in a country, the higher the labor force in that country.
3. Level of Education
The greater the number of people who are in productive age, the higher the workforce. And vice versa, the lower the education level of the population in a country, the lower the labor force in that country. This happens because now the level of education is one of the requirements to enter the work environment. For example, there is a job vacancy that requires a minimum S1.
4. The Problem of Workforce Impoverishment
This impoverishment of the workforce can occur due to several problems, including:
a. Productivity in Labor
This impoverishment of the workforce can occur when employment growth is not accompanied by increased productivity in the workforce. This condition also causes workers’ wages to not increase. So that the income of this workforce has not increased at all, while on the other hand all needs continue to increase.
This sustainable employment growth can only occur when all sources of growth occur in balance. The benefits of this labor productivity will only be obtained by the workforce who are working with limited employment opportunities. This condition can also lead to an ever-increasing social gap between the workforce.
b. Not Applying the Latest Technology
By not applying the latest technology can also make the workforce with the latest education and skills not too used. This low-skilled workforce will discourage investments that result in poor use of physical capacity. Therefore, nowadays many companies are looking for job applicants who can already use various types of today’s technological devices.
c. Lack of Workforce Development
Workforce development can also be based on government policies in developing a skilled workforce. Where the development of this work force can also be carried out through various kinds of availability of quality education as a basis for future work force training. Not only that, the development of the workforce will also be adjusted to the skills requirements for company needs and also the job market.
The purpose of this workforce development is to make the workforce have a high adaptability. So that it can be in line with technological changes and market changes. In addition, workforce development also aims to prepare the need for various kinds of skills needed in the future.
5. Increasing health insurance
With an increase in health insurance, the average age of the population will also increase. The average age will extend the productive period of each resident in doing each job. So that will increase the number of available labor force.
6. The Role of Women in the Economy
Women who work in household affairs are not considered as part of the labor force. If a woman has a certain job outside the home, then they will be included in the labor force.
Types of Labor Force
Basically, the workforce can be divided into two types, namely based on work and based on age and activity.
1. Based on the Job
The following is the type of workforce seen from their work, including:
a. Full Worker
In this case, what is meant by a fully employed workforce are those who already have a job, where their working hours range from 8 to 10 hours per day. In addition, groups of full workers also work regularly within one week, in accordance with the policies that apply to their respective companies. Full workers will also receive income for their work.
b. Half Unemployed
In this case, what is meant by the underemployed workforce are those who have jobs, but their work cannot be seen from their level of productivity, working time, or income. Usually, this one group is people who do not have a permanent job, such as working for a company. This category of underemployment can be divided into two, namely:
– Significant underemployment: those included in their group are those who work more or less 35 hours a week.
– Subtle underemployment: these are those who are not productive at work and have a fairly low income. Usually this category also includes people who do not have a permanent job as workers in a company.
c. Unemployment
What is meant by the unemployed workforce are people who are in their productive age but do not have a job or are in the process of looking for work. This one group can quickly turn into the workforce, if they get a job soon. There are six types of unemployment that need to be understood, including:
– Frictional Unemployment: This is unemployment caused by the difficulty of finding a job or suitable vacancies.
– Seasonal Unemployment: This is a condition of unemployment that occurs because the seasons are changing, like for example farmers.
– Cyclical Unemployment: This is unemployment that exists because there are cyclical ups and downs in an economy. So that the demand for work is lower when compared to the supply of labor.
– Structural Unemployment: This is unemployment caused due to a structural change or composition of the economy. For example, there has been a shift in the economy, from being dominant in the agricultural sector to becoming dominant in the industrial sector.
– Technological Unemployment: This is a condition where unemployment is used in a production process. The pace of this change is accelerating day by day.
– Unemployment Due to Lack of Aggregate Demand: This is unemployment which occurs due to the total demand of society which is based on investment activity.
2. Based on Age and Work Activity
The labor force as a group of people who are in the age range between 15 to 65 years or are in a productive period. However, not everyone who is in this age enters into active workers. This workforce can be differentiated based on work status or activities being carried out. Grouping like this will also make it easier to calculate and see the magnitude of the number of workers and unemployed in a community group.
Based on data from the Central Statistics Agency or BPS, the total workforce in Indonesia reached 144.01 million in February 2022. This number reached 69.06 percent of the total working age population, which totaled 208.54 million people. According to the BPS definition, the working age population is the population aged 15 years or more. While the labor force is the working age population who are working or have a job, but are temporarily not working or unemployed.
The largest workforce is in the age group of 25 to 29 years, reaching 17.18 million people. Followed by the 30 to 34 year age group with 16.89 million people, and the 35 to 39 year age group with 16.78 million people. The workforce in the 15 to 19 year age group is the least, namely only 5.98 million people. For the workforce aged 60 years and over reached 16.26 million people.
From the discussion above, we can conclude that those who are not included in the labor force are groups that are no longer in the labor force, such as residents who are already in the productive age group but are not yet working or do not want to work. For example, retirees who are under 65 years old, including women who choose to be housewives, young people who are still studying, and so on.
The workforce itself is a population that is still in productive age and already has a job or is in the process of looking for work. For example, graduates who are looking for work, company employees who have started working, and others.
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