Effect of government regulation on labor competitiveness: Study of nine major Indonesian companies

Abstract

Free trade that drives competition in the industrial world drives the need for welding power by 45,000 against a background of specifications. Indonesia has a professional welding force of no more than 15,000 people spread across various countries triggering a deficit in domestic labor that should handle infrastructure development, sea tolls, power plants, and railways. The problems currently being faced by the industry in the context of increasing the competence and competitiveness of the welding industry workforce. The study purposes to analyze the effect of government regulation to labor competitiveness. This research was conducted in November 2016-March 2017. Data obtained through interviews with 117 respondents distributed in 12 government companies with purposive sampling approach. Data statistical analysis technique is using Structural Equation Modeling. Government Regulation significantly and positively influences the competitiveness of workers with structural coefficient is 0.450 and p-value < 0.05. Indonesian Government can provide added value to the competitiveness of Indonesian workers through the use of authority to draw up regulations in the field of welding, set standard operational production and assist the recruitment process of workers.