Small industry development has the potential to reduce unemployment
because the use of labor-based technology. It is creating and expanding
employment. In fact, small industry crackers in Kendal District has not been able
to absorb quite a lot of manpower, so that has not been able to reduce
unemployment.
This study aimed to analyze the effect of the wage rate and the volume of
production to the demand for labor in small industries crackers in Kendal
District. The data used is primary data collected from 50 respondents crackers
small industrial entrepreneurs by means of questionnaires. The analytical method
used is multiple linear regression analysis (Ordinary Least Square).
Regression analysis showed that the level of wages did not affect the
demand for labor because it is not significant, and the value of elasticity -0256.
While the volume of production and a significant positive effect on the demand for
labor with the elasticity 0640. R2 value of 0583, which means that 58.3 percent of
the dependent variable (labor demand) can be explained by the independent
variables (wages and volume of production). While 41.7 percent of the rest is
explained by other variables outside the model used. Simultaneous testing results
show that overall the independent variables (wages and volume of production)
jointly affect the dependent variable (labor demand)