The Effect of Real Wages on Employment Absorption and Human Resource Quality: A Human Resource Management Perspective in Eastern Indonesia
DOI:
https://doi.org/10.63185/mej.v1i3.12Keywords:
Real Wages, Employment Absorption, Human Resource Quality, Human Resource ManagementAbstract
This study aims to examine the effect of real wages on employment absorption and human resource (HR) quality in Eastern Indonesia from a Human Resource Management (HRM) perspective. The study employs a quantitative approach using secondary data collected from several provinces in Eastern Indonesia over the 2010–2023 period. The data were analyzed to examine the direct effect of real wages on HR quality as well as the indirect effect through employment absorption. The findings indicate that real wages have a positive and statistically significant effect on HR quality. Higher purchasing power enables households to meet educational, healthcare, nutritional, and other productive needs, thereby contributing to improvements in overall quality of life and human capital. However, real wages do not have a statistically significant effect on employment absorption, and employment absorption does not mediate the relationship between real wages and HR quality. These findings suggest that an increase in the number of employed individuals does not necessarily translate into higher human resource quality when available jobs are characterized by low wages, employment instability, and limited social protection. From a Human Resource Management perspective, wage policies should be integrated with productivity enhancement, competency-based training, social protection, and the creation of decent employment opportunities.
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