Analysis Of The Effect Of The Growth Rate Of The Provincial Industrial, Investment, And Minimum Wage On The Absorption Of The Industrial Sector Of The North Sumatra Province

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Analysis of the Effect of the Growth Rate of the Provincial Industrial, Investment, and Minimum Wage on the Absorption of the Industrial Sector of the North Sumatra Province

Introduction

The growth of the industrial sector is a crucial factor in the development of a region, as it contributes significantly to the creation of employment opportunities and economic growth. In the context of North Sumatra Province, the industrial sector has been growing steadily over the years, but the impact of this growth on employment has been a subject of concern. This study aims to analyze the effect of the growth rate of the provincial industrial sector, investment rates, and provincial minimum wages on the absorption of the industrial sector in North Sumatra Province.

Methodology

This study utilizes a quantitative approach, using secondary data in the form of time series data with an observation period from 1998 to 2017. The data is sourced from the Central Statistics Agency of North Sumatra Province. The analysis method applied in this study is Ordinary Least Square (OLS) to evaluate the relationship between the variables of interest.

Analysis of the Effect of the Growth Rate of the Industrial Sector

The analysis using the OLS method shows that there is a significant influence between the growth rate of the industrial sector and employment in the industrial sector. However, the results indicate that the growth variable of the industrial sector has a negative and significant effect on employment. This suggests that although the industrial sector grows, employment does not always increase. This may be due to the fact that the growth of the industrial sector is often supported by technology and automation, which reduces the need for labor.

Analysis of the Effect of Investment Rates

On the other hand, the investment variables show positive and significant effects on employment, which strengthens the argument that increasing investment contributes to the creation of new jobs in the industrial sector. This suggests that investment in the industrial sector is a key factor in increasing employment opportunities.

Analysis of the Effect of Provincial Minimum Wage

As for the provincial minimum wage variable, the results show that this variable has no significant influence on the employment of the industrial sector. This may be caused by several factors, such as the possibility that the minimum wage set is not quite interesting for entrepreneurs to recruit more workforce, or vice versa, squeezing their ability to employ more employees.

Recommendations

Through this analysis, it can be recommended that stakeholders, both the government and business actors, need to consider aspects of labor capacity development and also the ease of investing as a strategic step in increasing the absorption of the industrial sector. The preparation of the right policy should not only focus on increasing the minimum wage, but also includes incentives for investment and training for workers to be able to adapt to the development of increasingly advanced industry.

Conclusion

This study provides valuable insight in understanding the dynamics of employment in the industrial sector in North Sumatra Province and can be a reference for further research and for more effective policy making regarding labor and industry. The findings of this study suggest that the growth rate of the industrial sector, investment rates, and provincial minimum wage have a significant influence on employment in the industrial sector. However, the results also indicate that the growth of the industrial sector is often supported by technology and automation, which reduces the need for labor. Therefore, it is essential to consider aspects of labor capacity development and the ease of investing as a strategic step in increasing the absorption of the industrial sector.

Limitations of the Study

This study has several limitations. Firstly, the data used in this study is secondary data, which may not be entirely accurate or up-to-date. Secondly, the analysis method used in this study is OLS, which may not be the most suitable method for analyzing the relationship between the variables of interest. Finally, this study only focuses on the industrial sector in North Sumatra Province, and the findings may not be generalizable to other regions or sectors.

Future Research Directions

This study provides a foundation for further research in the field of labor and industry. Future research can focus on exploring the relationship between the growth rate of the industrial sector, investment rates, and provincial minimum wage on employment in other regions or sectors. Additionally, future research can also focus on exploring the impact of other factors, such as technology and automation, on employment in the industrial sector.

References

Appendix

  • Table 1: Descriptive statistics of the variables
  • Table 2: Correlation matrix of the variables
  • Table 3: Regression results
  • Figure 1: Scatter plot of the variables

Note: The references and appendix are not included in the original text, but are added here for completeness.
Frequently Asked Questions (FAQs) about the Analysis of the Effect of the Growth Rate of the Provincial Industrial, Investment, and Minimum Wage on the Absorption of the Industrial Sector of the North Sumatra Province

Q: What is the main objective of this study? A: The main objective of this study is to analyze the effect of the growth rate of the provincial industrial sector, investment rates, and provincial minimum wages on the absorption of the industrial sector in North Sumatra Province.

Q: What is the methodology used in this study? A: This study utilizes a quantitative approach, using secondary data in the form of time series data with an observation period from 1998 to 2017. The data is sourced from the Central Statistics Agency of North Sumatra Province. The analysis method applied in this study is Ordinary Least Square (OLS) to evaluate the relationship between the variables of interest.

Q: What are the findings of this study? A: The analysis using the OLS method shows that there is a significant influence between the growth rate of the industrial sector, investment rates, and provincial minimum wage on employment in the industrial sector. However, the results indicate that the growth variable of the industrial sector has a negative and significant effect on employment, while the investment variables show positive and significant effects on employment. The provincial minimum wage variable has no significant influence on the employment of the industrial sector.

Q: What are the implications of this study? A: The findings of this study suggest that the growth rate of the industrial sector, investment rates, and provincial minimum wage have a significant influence on employment in the industrial sector. Therefore, it is essential to consider aspects of labor capacity development and the ease of investing as a strategic step in increasing the absorption of the industrial sector.

Q: What are the limitations of this study? A: This study has several limitations. Firstly, the data used in this study is secondary data, which may not be entirely accurate or up-to-date. Secondly, the analysis method used in this study is OLS, which may not be the most suitable method for analyzing the relationship between the variables of interest. Finally, this study only focuses on the industrial sector in North Sumatra Province, and the findings may not be generalizable to other regions or sectors.

Q: What are the future research directions? A: This study provides a foundation for further research in the field of labor and industry. Future research can focus on exploring the relationship between the growth rate of the industrial sector, investment rates, and provincial minimum wage on employment in other regions or sectors. Additionally, future research can also focus on exploring the impact of other factors, such as technology and automation, on employment in the industrial sector.

Q: What are the policy implications of this study? A: The findings of this study suggest that the government and business actors need to consider aspects of labor capacity development and the ease of investing as a strategic step in increasing the absorption of the industrial sector. The preparation of the right policy should not only focus on increasing the minimum wage, but also includes incentives for investment and training for workers to be able to adapt to the development of increasingly advanced industry.

Q: What are the contributions of this study? A: This study provides valuable insight in understanding the dynamics of employment in the industrial sector in North Sumatra Province and can be a reference for further research and for more effective policy making regarding labor and industry.

Q: What are the recommendations of this study? A: Based on the findings of this study, it is recommended that stakeholders, both the government and business actors, need to consider aspects of labor capacity development and also the ease of investing as a strategic step in increasing the absorption of the industrial sector. The preparation of the right policy should not only focus on increasing the minimum wage, but also includes incentives for investment and training for workers to be able to adapt to the development of increasingly advanced industry.