Factors Affecting Labor Absorption: Case Study In South Sumatra Province

Abstract

Abstract. The study was conducted to analyze the influence of the provincial minimum wage, economic growth, investment, agricultural sector minimum wage and non-agricultural sector minimum wage on labor absorption in South Sumatra in 1998-2017. The data used in this study is secondary data sourced from the Statistical Center of South Sumatra and publications from previous studies that were related to this study. Data were analyzed by multiple regression analysis and collected from 1998-2017 (20-year period) The results of the study are expected to be a reference for further research and considered in implementing policies of labor issues in South Sumatra. Purpose. The purpose of this study is to determine the factors that influence labor absorption in South Sumatra in 1998-2017. Result. The results of this study indicate that the provincial minimum wage has no effect on labor absorption in South Sumatra. However, economic growth, investment, and minimum wages in the agricultural and non-agricultural sectors affect labor absorption in South Sumatra. Conclusion. The results of the study showed that the government in South Sumatra should be concerned in preparing wage policies both for the provincial minimum wage and the sectoral minimum wage by considering various related parties such as companies and workers themselves. Also, economic growth and the investment value which distributed evenly can increase labor absorption and create prosperity for workers.

Keywords

• provincial minimum wages
• economic growth
• investment; agricultural sector minimum wages
• non-agricultural sector minimum wages
• labor absorption