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Perppu on Job Creation Anticipates Global Economic Turmoil


The government needs to mitigate by implementing policies that aim to prevent Indonesia’s economy from falling due to the threat of a global recession. The policy is in the form of a Government Regulation in lieu of a Job Creation Law (Perppu).

The Job Creation Perppu is considered capable of realizing a prosperous, just and prosperous Indonesian society. This is because Perppu number 2 of 2022 allows for a very broad absorption of labor in the midst of intense competition.

Benny Riyanto as Professor of Law at Semarang State University (UNNES), explained that the issuance of the Job Creation Perppu is something that is really needed. Considering that Indonesia is currently facing the threat of a global crisis and requires a policy that is made quickly and precisely.

Perppu Number 2 of 2022 was made because currently the world is facing a global crisis including Indonesia, it is necessary to take quick steps to deal with this condition, especially related to the need for a legal umbrella in strategic policies, as well as implementing the order of the MK Case Number 91/ PUU-XVII/2020.

Not only that, the existence of the Job Creation Perppu is also able to fill the legal vacuum that has occurred because the Job Creation Law is still considered conditionally unconstitutional by the Constitutional Court. On the other hand, if you want to issue a law with the usual procedure, it will take a long time even though it is in the midst of a very necessary condition.

Of course, this legal vacuum cannot be overcome by making laws in the usual way because it will take quite a long time, while this urgent situation needs certainty to be resolved.

The existence of Perppu No. 2 is something that is really needed by Indonesia, because this policy is a real solution for the Indonesian government so that it can still implement the Constitutional Court’s decision in the midst of an urgent situation.

The Director General for the Development of Industrial Relations and Social Security (PHI and Social Security) of the Ministry of Manpower, Indah Anggori Putri explained that there had been a change in substance in the Job Creation Perppu when compared to the regulations derived from the copyright law.

In the Job Creation Perppu issued at the end of 2022, there has been a change in the calculation formula taking into account three variables, namely economic growth, inflation and certain indices.

This change is intended to provide a more adaptive formula for calculating the minimum wage.

Putri said that changes also occurred with the confirmation of the requirements for setting the district/city minimum wage (UMK). The UMK can be determined if the calculation result is higher than the provincial minimum wage (UMP).

Changes also occurred in relation to the government’s authority in determining the formula for calculating a different minimum wage in the event of certain circumstances. The new provisions have the intention of providing a legal basis for the government in an effort to overcome certain conditions that have an impact on the continuity of work and business.

Meanwhile, the Coordinating Minister for the Economy Airlangga Hartarto said that one of the government’s strategies to survive the threat of a 2023 global recession is to have legal certainty regarding investments that will enter Indonesia.

The issuance of the Job Creation Perppu is important to provide guarantees to all elements, not only to employers, but also to workers. Airlangga also believes that the Job Creation Perppu also aims to ensure the welfare of workers.

Moreover, workers affected by layoffs will be given a job loss guarantee of 45% of salary and receive training in the form of retraining and reskilling. Both of these are given for 6 months to workers affected by layoffs.

In addition, to deal with an abnormal global economic situation, ease of doing business and a better climate are needed. Thus, through the Job Creation Perppu it is hoped that domestic investors will be able to expand their business, and MSMEs will continue their business in a sustainable manner.

He also explained that the issuance of the Job Creation Perppu was urgent, because the government needed to anticipate various risks of global uncertainty, including the potential for a global recession.

Airlangga also revealed that the government is setting a budget deficit for 2023 of less than 3% by relying on investment which is targeted to reach Rp. 1.400 trillion in 2023.

The issuance of the Job Creation Perppu is indeed based on an emergency and is a follow-up to the Constitutional Court’s decision as written in the Perppu.

According to him, the government really needs the Perppu to move the wheels of the economy in the midst of many economic conditions that are not very friendly for national development.

The impact of the global recession is real. That is why it must be anticipated quickly in Indonesia. A global recession can clearly lead to an increase in inflation. Moreover, many countries have queued up to the IMF.

Economic turmoil is something that is not expected, because it can affect the economy in Indonesia, the threat of mass layoffs can occur, so the government needs to mitigate it by issuing a Job Creation Perppu. (Indra Fajar Mahendra, Contributor to Nusantara Reading Room)

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