The Effect of Minimum Wage, Education Level and Inflation on Employment in Pekanbaru City

Abstract

One aspect of the employment issue is labor. Individuals of working age who fall into the unemployed category because they can't be successfully absorbed. To promote evenly distributed economic development, emerging countries must encourage labor absorption as one of the critical components of their economic development strategies. This study investigates the impact of the minimum wage on the ability to absorb energy, the role of education level on labor absorption, and the relationship between inflation and employment in Pekanbaru City. Time series data used in the data analysis method spans 2006–2021. This study used multiple linear regression analysis methods. The results showed that the minimum wage had a partial positive and significant effect on the employment of labor, the level of education had a negative and significant impact on labor absorption, and inflation had a negative and significant effect on employment in Pekanbaru City. Simultaneously, the minimum wage, education level, and inflation have a significant impact on employment in Pekanbaru City, with R-Square at 88.1%. In contrast, the rest, 11.9%, were influenced by other variables that were not studied.