industries;  (6)  Industries  of  non-metallic  minerals 
except  oil  and  coal;  (7)  Base  metal  industry;  (8) 
Manufacture  of  metal  goods,  machinery  and 
equipment;  (9)  Other  processing  industries.  (BPS 
North Sumatra, 2017). Of the 9 industrial groups, the 
growth  of  the  number  of  industries  each  year  from 
2013-2016  fluctuated,  the  highest  growth  was 
achieved  by  the  food,  beverage  and  tobacco 
industries.  The  role  of  growth  in  the  9  industrial 
groups  will  have  an  impact  on  the  number  of 
workers used. 
Absorption  of  labor  in  9  industrial  groups  each 
year fluctuates. The highest absorption of labor is in 
the  food,  beverage  and  tobacco  industry  sectors 
where  the  number  of  workers  employed  in  2016  is 
89,782  people.  While  the  lowest  was  in  other 
processing  industries,  which  amounted  to  2,655 
people. So  that it  can be  concluded that the  role of 
the  food,  beverage  and  tobacco  industry  sector  is 
able  to  spur  regional  economic  growth  and  the 
development  of  the  industrial  sector  in  North 
Sumatra  Province. The  growth  and  development of 
the  industrial  sector  promises  to  broaden 
employment  opportunities.  On  the  other  hand,  the 
government  wants  to  optimize  the  role  of  the  food, 
beverage  and  tobacco  industries  in  North  Sumatra 
province  in contributing to  the demand  for labor  so 
that there needs to be an in-depth study of the factors 
that  affect  labor  demand  in  the  food,  beverage  and 
tobacco industries. 
According  to  Simanjuntak  (1985)  and  Hani 
Handoko  (1985),  Demand  for  labor  in  the  small 
industrial  sector  is  influenced  by  internal  and 
external  factors  of  each  of  its  business  units. 
Internally  influenced  by  output  values,  wage  rates, 
labor  productivity,  capital  (technology),  and  other 
non-wage  expenditures.  While  externally  is 
influenced  by  the  level  of  economic  growth, 
inflation, unemployment and interest rates. Based on 
the research of  Afrida (2003)  that  the high  and low 
absorption  of labor by the economic sector depends 
on several factors such as output value, wage level, 
education  level  (labor  quality),  working  capital  and 
the  number of  industries.  In line  with  the results  of 
the  study  of  Esti  R  (2003)  that  the  factors  that 
influence  labor  demand  are  industrial  output, 
working  capital  (investment),  wage  level  and  the 
number  of  industries  used  by  the  sector.  Based  on 
the  results  of  previous  research  the  author  tried  to 
examine  the  factors  that  influence  labor  demand, 
namely: industrial investment, number of industries, 
wage level and GRDP. 
 
2  THEORICAL FRAMEWORK 
2.1  Effects  of  Investment  Industrial  Sector  on 
Labor Demand 
In  Keynes's  macro  theory,  to  decide  whether  an 
investment will be carried out or not depends on the 
comparison  between  the  amount  of  expected  profit 
(expressed  in  percentage  per  unit  time)  on  the  one 
hand  and the  cost of  using  funds /  interest rates  on 
the other. This expected level of  profit is called the 
Marginal  Efficiency  of  Capital  /  MEC  (Boediono, 
1986). In summary this concept can be described, if 
the expected profit (MEC) is greater than the interest 
rate, then the investment is carried out. If the MEC 
is smaller than the interest rate, then the investment 
should not be carried out and if the MEC = the 
interest rate, then the investment may be carried out 
and  may  not  be  in  accordance  with  the  decision of 
the owner of the capital. 
From  the  description  above  it  is  known  that  the 
level  of  investment  desired  by  investors  is 
determined  by  two  things,  namely  the  interest  rate 
that  applies  the  MEC  or  investment  function.  This 
MEC  function  /  investment  function  shows  the 
relationship between the prevailing interest rate and 
the  level  of  investment  expenditure  desired  by 
investors. 
Through the investment function curve there are 
three  things  that  need  to  be  underlined  about  this 
investment function, that is, first, the function has a 
negative  slope  which  means  that  the  lower  the 
interest  rate,  the  greater  the investment  expenditure 
desired or planned by investors. 
Second,  in  reality  this  investment  function  is 
difficult to obtain because its position is very  labile 
and  easily  changed  in  a  short  period  of  time.  The 
volatility  of  the  investment  function  can  be 
understood,  because  its  position  is  very  dependent 
on the MEC values of the existing projects and that 
the MEC is the profit expected by investors. Because 
it  is  based  on  future  expectations  /  expectations  (if 
on  the  basis  of  subjective  calculations)  where  the 
MEC of  a  project may  change from  day to day  and 
sensitive  to  changes  in  the  socio-economic 
conditions  of  a  country.  The  existence  of  political 
turmoil in an area, rumors of a devaluation, the issue 
of  foreign  exchange  control,  and  restrictions  on 
imports for  example will  directly be  able to  change 
the subjective judgment of investors in a project. So 
many factors  influence the  MEC, so  the position  of 
investment  functions  will  be  very  easy  to  change. 
The  volatility  of  the  investment  function  is  a 
theoretical  and  Keynesian  explanation  of  the  fact 
that  in  reality  investment  expenditure  (I)  shows