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Tourism Employment Issues: Examples from Indonesia

In summary, knowledge about tourism employment has largely been derived
from research conducted in a developed country context and what knowledge has
been established specifically for developing countries has not been based on empir-
ical research in the tourism sector. This article will present results of tourism
employment research conducted in Bali, Indonesia from 1991–95 and more re-
cently, in 1999.

Tourism and Employment
Tourism creates a multitude of employment opportunities in both the formal and
informal sectors. Additionally, tourism may create three types of employment op-
portunities: direct, indirect and induced. Direct employment refers to employment
generated in, for example, hotels, restaurants, tour companies and nightclubs. Indirect
employment refers to people working in activities that at times are dependent on
tourism, and includes the construction trades, professionals such as doctors who oc-
casionally serve hotel employees and tourists, merchants, gasoline station attendants
and others who are less dependent but still benefit from tourism. Induced employment
refers to the additional employment resulting from the effects of the tourism multi-
plier as local residents re-spend the additionalmoneythey have earned (Mathieson&
Wall, 1982). Tourism employment can be described as the combination of all direct,
indirect and induced employment, in both the formal and informal sectors, resulting
from the tourism industry.

Tourism employment impacts
Various researchers have attempted to demonstrate the impact of tourism as a
formal sector employer. In Bermuda, for example, Dix (1989) estimated that tourism
supported 70% of all employment on the island. However, the impact of tourism on
employment is underestimated when viewed solely in terms of direct employment.
That is, the actual impact is far greater when considering the effect on the economy
as a whole through the addition of both indirect and induced employment. Al-
though it is possible to gauge the impact of expected tourist expenditures on direct
and indirect employment (Mappisammeng, 1991; Booth, 1988), a lack of accurate
figures for the total numbers of people employed in either indirect or induced
tourism activities makes it difficult to calculate how many people are affected.
Varley (1978) hypothesised that the volume of indirect employment generated by
tourism was dependent on the degree of linkage between the tourism sector and
other sectors of the economy. In his studies in Fiji, he noted that the higher the
degree of integration and diversification in the economy was, the higher the
amount of indirect employment generated. Additionally, cyclical variations in the
volume of tourists or their expenditures do not necessarily affect the absolute
numbers of people employed, but definitely affect the earnings of those employed
in the tourism sector, particularly season to season.
A few researchers have attempted to examine the impacts of tourism employ-
ment on the informal sector. In Indonesia, it is estimated that more than 50% of the
general labour force is absorbed into the informal sector and that consumer-ori-
ented tertiary activity is the sector that accommodates the greatest number of
informal workers (Wirosardjono, 1984). Much of the employment generated by
tourism is in the form of self-employed, small-scale entrepreneurs including
guides, small store owners, shop workers and vendors (Echtner, 1995). The employ-
ment effects of the informal sector are often excluded in the assessment of tourism
employment because official employment data do not include this sector. Addi-
tionally, the indirect employment effects are dependent on the degree of linkage
between the tourism sectors and other producing sectors (Varley, 1978; Sharpley,
1994). The impacts of tourism employment on the informal sector will be discussed
in greater detail in a subsequent section.
Although tourism employment is usually analysed in terms of economic benefit,
the social and cultural implications of tourism employment also deserve consider-
ation. As stated by Pleumarom (1994), the ‘development’ of ‘underdeveloped areas’
requires more than capital input and technology transfer. Cultures too have to be
reconciled with economic competition and integration. Tourism provides a means
to achieve both. Through the creation of employment, tourism can provide an op-
portunity for the local population to increase its income and improve its standard of
living. Furthermore, from a social viewpoint, tourism employment can positively
affect quality of life through increases in social status or the provision of new oppor-
tunities for youth and women or negatively by placing additional stress on the
society through the influx of new migrants to the area, increased urbanization and
increased consumerism as a result of a demonstration effect. The extent to which the
population benefits economically and socially is dependent on many factors, in-
cluding the number of jobs held by expatriates or new migrants to the area, the level
of skill required for the job and the type of tourist resort (De Kadt, 1979a: Sharpley,

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