Wages of Workers Spatial Analysis in Indonesia Region 2019

Abstract

The wage inequality of workers in Indonesia is one of the main problems and concerns that are important to be addressed by the government. The determination of the regional minimum wage by the local government has not been able to solve the problem of inequality. On a larger scale, the wage inequality of workers can affect the stability of the national economy. Research on the spatial analysis of workers' wages is very important to be carried out as a basis for making appropriate policies by the government. In this study, we have succeeded in analyzing the dependence and spatial relationship of a region with the wages of its workers and have identified the factors that affect the wages of workers in a region. The result reveals the spatial dependences are detected among districts, followed by the spatial clusters and spatial outliers through global and local spatial autocorrelation. Applying two spatial autoregressive models, spatial autoregressive lag model (SAL) and spatial autoregressive error model (SEM), SAL confirmed that there are 4 significant independent variables with a level of 10 percent and have a positive relationship, namely education, age, internet, and sex ratio variables. And SEM confirmed that there are significants 5 significant independent variables with a level of 10 percent and have a positive relationship, namely education, age, technology, internet, and sex ratio variables. As the policy implication, since regional inequality in term of wage is still a major issue, it will be a call for better coordination and cooperation within and between regions.