This study aims to investigate the effect of business units, investment value, production value, City Minimum Wage (UMK) and economic growth on labor absorption. The data in this study were obtained from the publication of Kota Batu in Figures (BPS Kota Batu) and the Department of Investment and Manpower of Batu City. The method of analysis uses descriptive statistics and multiple regression analysis using the help of EViews11. The results of this study indicate that business units, investment value and economic growth have a major impact in increasing labor absorption in the formal and informal industrial sectors. Business units are the main determinants in increasing labor absorption in the formal and informal industrial sectors. Batu City Government needs to create a conducive investment climate, in order to attract investors so that the industry
can develop both in terms of quality and quantity so that it is expected to create new jobs and reduce unemployment
