The Job Creation Law is a major step taken by the Indonesian government to improve the investment climate and facilitate the opening of wider job opportunities. With various regulatory changes, this law is designed to increase the efficiency and competitiveness of the national economy, which in turn can help reduce unemployment and poverty.
One of the main objectives of the Job Creation Law is to increase labor absorption. By simplifying regulations and providing incentives to investors, this law aims to attract more foreign and domestic investment. This increase in investment is expected to create more job opportunities, both through building new industries and developing existing sectors.
In 2021, the Coordinating Ministry for Economic Affairs noted that the Job Creation Law succeeded in creating 912,402 new jobs in the first three quarters of the year. This positive impact can be seen from significant increases in sectors such as manufacturing, services and information technology.
By creating more jobs and strengthening the MSME sector, the Job Creation Law is expected to make a significant contribution to poverty alleviation. According to the Minister of Cooperatives and SMEs, Teten Masduki, strengthening MSMEs through the digital economy and incubation assistance is expected to increase the competitiveness of MSMEs in domestic and international markets.
Apart from that, the ease of setting up a business introduced by this law, such as the exemption from licensing fees for micro and small businesses, as well as the simplification of procedures through OSS ( Online Single Submission ), provides greater opportunities for people to become entrepreneurs. In this way, more people can earn a decent income and get out of the poverty line.
Gadjah Mada University (UGM) economics expert Professor Doctor Gunawan Sumodiningrat said that the big mission of the Job Creation Law (UU) is to eradicate poverty in Indonesia with the main goal in life, namely achieving happiness.
According to him, humans can achieve happiness if their lives are comfortable. The foundation of comfort is not being hungry. The philosophy of life’s goal is simple, to be happy. In order not to be hungry, people have to work. To work, you need employment opportunities that can accommodate the workforce.
As one of the academics involved in drafting the Job Creation Law, Gunawan said that a number of parties opposed the existence of this regulation because they did not understand its main aim, namely alleviating poverty.
However, a business that generates employment cannot operate alone. It requires cooperation with many parties. Therefore, partnerships are the main key to achieving the targets of the Job Creation Law. The presence of the Job Creation Law aims to simplify bureaucracy so as to make business licensing easier. Ease of business permits will result in many entrepreneurs creating job opportunities.
Based on the Institute for Management Development (IMD) World Competitiveness Ranking 2024 report , Indonesia’s competitiveness ranking has indeed increased to 27th position from the previous position of 34th. Jokowi believes that the increase in competitiveness ranking is the result of the implementation of the Job Creation Law (UUCK). Because, according to him, the main increase in Indonesia’s competitiveness is supported by the stability of economic conditions, the business world and government.
This indicates that the Job Creation Law has increased Indonesia’s economic competitiveness rapidly. Coordinating Minister for the Economy, Airlangga Hartarto, said that so far the Job Creation Law has made it easier for employers to recruit workers as well as resolve labor disputes. This is considered to increase Indonesia’s work productivity.
The Job Creation Law makes it easier to recruit and resolve labor disputes and is also considered to make our productivity higher.
One thing that is good is Indonesia’s competitiveness based on the IMD of 67 countries, we jumped from 34 to 27. One is related to the domestic economy in terms of government institutions, this is certainly a result of the job creation law.
Many people support this policy, especially business actors and investors. They see this law as a progressive step that is able to overcome various bureaucratic and regulatory obstacles that have hampered economic growth.
For example, the MSME sector greatly benefits from easier access to markets and financing. Government support in the form of pro-MSME policies is expected to increase the competitiveness and productivity of MSMEs, which in turn will open up more job opportunities and reduce poverty.
The Job Creation Law is a strategic step by the Indonesian government to increase labor absorption and reduce poverty. With various policies that are pro-investment and pro-MSMEs, this law is expected to create a more conducive business climate, attract more investment and open up more job opportunities. Despite various challenges and criticism, support from the community and business actors shows that many are optimistic about the positive potential of implementing the Job Creation Law.