By: Gema Iva Kirana )*
The Job Creation Law is the mainstay of the government’s law to deal with the large number of unemployed. In addition, this law is also a solution to optimize Indonesia’s demographic bonus. When the number of people of productive age increases, it is necessary to provide jobs and the solution is the Job Creation Law which invites investment and opens job vacancies.
Indonesia is a country with a large population and a total of more than 220 million people. The large population is quite a confusing problem because there is more and more competition, especially in the world of work. Even though being unemployed is certainly heartbreaking because you can’t get your monthly salary and you are confused because you have to support your family.
Competition for work occurs because more people are in productive age, namely between 15 to 65 years, than those who are not in productive age. This is called the demographic bonus. The existence of a demographic bonus is like a boomerang because the number continues to increase, in fact it is estimated that there will be 52 million people of productive age in 2030. They will be fighting for jobs and must be addressed immediately.
To overcome the demographic bonus, the government created the Job Creation Law which can expand employment opportunities while optimizing Indonesia’s demographic bonus. Employment Expert from Gadjah Mada University Prof. Tadjudin Noer Effendi stated that the Job Creation Law could be the key to absorbing the demographic bonus by creating the widest possible job opportunities.
Prof. Tadjudin explained that in 2035 Indonesia will be at the peak of the demographic bonus. It is estimated that 70 percent of Indonesia’s population or around 148.5 million are youth of productive age who are expected to be able to improve the nation’s economy.
The birth of the Job Creation Law can be a formulation prepared by the government in taking advantage of the demographic bonus. Therefore, in the productive age, which almost reaches 65% of them, jobs must be created.
Unemployment, which is included in the demographic bonus, must be addressed because if not, it will be dangerous. If the population is too large and the majority do not have a job, then the crime rate can increase and there are other social problems.
Therefore, the community supports the implementation of the Job Creation Law because it increases employment. Currently, employment is urgently needed to reduce the number of unemployed in Indonesia. If there are many unemployed then it is dangerous for the economy because there are fewer people spending, because they really don’t have money. Even though the wheels of the economy must turn and the way is to increase spending by the public.
Prof. Tadjudin added, the Job Creation Law is also a government commitment and policy that must be properly supported and implemented. Apart from improving the investment climate, this regulation also provides support to promote micro, small and medium enterprises and create jobs.
The Job Creation Law carries out a structural overhaul for improvements related to the investment ecosystem whose purpose is to create job opportunities. This includes the issue of overlapping regulations which have been alleged to be a barrier to investment into the country.
Meanwhile, Elen Setiadi, Expert Staff for Regulation, Law Enforcement, and Economic Resilience at the Coordinating Ministry for Economic Affairs, stated that the Job Creation Law will facilitate the investment climate and ultimately be able to open up many job vacancies, because there are companies from foreign investment.
Previously, there were 44,000 rules that hindered the regulation of investment and the business world. If the rules are too fat it will complicate things. Therefore the Job Creation Law is here to cut regulations and make it easier for foreign investment in Indonesia.
Deputy Chairperson of KADIN Shinta W Komdani stated that with the Job Creation Law the government could prepare regulations when there was an investment boom later. When the pandemic is over, there will be many requests for work and finally preparations for creating jobs will be made. The government wants to eradicate unemployment so that people will be more prosperous.
The Job Creation Law makes investment licensing easier in Indonesia, so the rules are simpler. The waiting period for an exit permit is also short, not for years like before. This rule change encourages foreign investors to invest in Indonesia. Automatically the country will get additional foreign exchange and improve its financial condition.
Projects made from investment results certainly need a lot of employees, from unskilled laborers to administrative workers. This is very good because it can open up many job vacancies.
Article 4 of the Job Creation Law states that job creation is carried out through arrangements related to improving the investment ecosystem. There is also a guarantee of workers’ welfare and protection through the minimum wage. So workers applying for foreign investment projects need not be afraid because they are guaranteed to get a very decent salary.
The Job Creation Law was able to optimize Indonesia’s demographic bonus and increase employment opportunities. When foreign investment is facilitated, investors will enter and be interested in investing their money. In this way, many new jobs will emerge and overcome Indonesia’s demographic bonus.
)* The author is a contributor to Persada Institute
