Substitution of Local Workers by Foreign Workers: A Threat to Job Availability in Indonesia

The increasing presence of foreign workers (TKA) in Indonesian industrial areas has raised concerns about the marginalization of local workers in the domestic labor market. This study aims to analyze the influence of TKA dominance on job availability for local workers, focusing on the Morowali Industrial Estate, Central Sulawesi. This study uses a quantitative approach with the Structural Equation Modeling (SEM) method to examine the relationship between TKA dominance, local labor substitution, and job availability. Data were obtained through a survey of 100 local workers who work or live around the industrial area. The results show that TKA dominance has a significant effect on decreasing job availability, both directly and through the mediation of local labor substitution. This finding confirms that employment policies that are less favorable to local workers can widen the gap in job opportunities, especially in industrial areas with high foreign investment. Therefore, affirmative strategies and strict policies regarding the recruitment of TKA are needed to prevent their presence from causing a substitution effect that is detrimental to local workers