President Jokowi’s Efforts to Improve Workers’ Welfare Through the Ratification of the Job Creation Law
By: Teguh Ahmad Insani )*
The Job Creation Law, which was passed in 2020, is one of President Jokowi’s strategic steps to address various challenges in the business and employment world. One of the main focuses of this law is to improve workers’ welfare amidst the dynamics of the ever-evolving job market.
President Jokowi’s administration introduced the Job Creation Law as part of an important reform in employment policy with the aim of improving worker protection and welfare. These changes include simplifying regulations regarding employment relationships, employment contracts, and termination of employment (PHK). These reforms aim to create fairer and more flexible employment relationships, which in turn can improve worker welfare.
The Job Creation Law also strengthens social security programs that include various forms of protection for workers. With better pension, health, and work accident insurance, workers have stronger protection against risks that can affect their well-being. This includes protection for health risks, work accidents, and financial certainty in retirement.
In today’s economic outlook, unemployment rate is considered as one of the main indicators of the success of government performance. The government has a primary duty to address this issue, while still paying attention to workers’ welfare and preserving the environment through job creation.
According to the Head of the Coordinating Minister for Economic Affairs’ Assistance Team, Tirta Hidayat, there is no point in discussing income, health, and education if people do not have jobs. Tirta explained that in economics there is a term called a vicious circle involving income, education, and health. Individuals with low incomes tend not to be able to access proper education and health services, so they are trapped in the circle. Therefore, the government designed the Job Creation Law to increase employment opportunities by improving the investment climate.
However, there is an assumption that the Job Creation Bill will reduce workers’ welfare. Assistant Deputy for Manpower of the Coordinating Ministry for Economic Affairs, Yulius, stated that through this law, workers’ welfare will be more guaranteed. He also emphasized that the minimum wage in Indonesia is higher than in neighboring countries, but is not balanced with adequate productivity. This condition causes the competitiveness of Indonesian products to decline in the international market.
Yulius added that initially his team tried to calculate workers’ wages based on a “safety net”, but the results were too far, so it was decided to take a middle ground. Although the current economic conditions have not improved and many workers have been laid off, the government ensures that workers’ wages will continue to increase. Regarding severance pay, the amount is slightly reduced from 19 months to 17 months, but is supplemented with other facilities such as education and the pre-employment card program. Yulius also emphasized that with the Job Creation Bill, the rights of workers with Fixed-Term Employment Agreements (PKWT) and permanent workers are equalized. Therefore, the assumption that this law will harm workers is very wrong.
Meanwhile, Minister of Manpower, Ida Fauziyah, ensured that the Job Creation Law (UU) still provides welfare guarantees for workers, as regulated in the previous law. She explained that all provisions regarding Fixed-Term Employment Agreements (PKWT) in Law Number 13 of 2003 remain in effect in the Job Creation Law. In fact, this new law provides additional protection for contract workers, stating their right to receive compensation after the contract is completed, the same as permanent workers.
Ida said that many workers/laborers have protested the ratification of the Job Creation Law. According to her, the dissatisfaction occurred because many workers still do not fully understand the contents of the Job Creation Law, resulting in misunderstandings regarding the substance of the law. For example, Ida mentioned the issue of workers being contracted for life. However, in the Job Creation Law, there are no regulations governing this, because the maximum contract period will be regulated through government regulations. This allows workers to become permanent sooner or later, depending on the rules that apply.
The Job Creation Law also regulates the protection and improvement of workers’ welfare. As derivative regulations, there are 4 PPs that regulate the implementation of the Job Loss Guarantee Program (JKP) and improve provisions regarding working hours, employment relationships, and termination of employment (PHK), as well as wages. In addition, the Job Creation Law also clarifies and emphasizes provisions regarding the use of foreign workers (TKA) which are needed only for the transfer of expertise/skills and new technology, as well as the implementation of investment.
In addition, the Job Creation Law strengthens legal protection for workers, providing certainty and security in doing business. Better legal certainty helps workers feel safer and more protected in carrying out their work activities, thereby improving their overall welfare.
The Job Creation Law is designed to improve workers’ welfare through various policy reforms and support programs. By strengthening social security, increasing the flexibility of employment relationships, and providing training and skills development programs, the law aims to create a better working environment and improve workers’ welfare. Despite the challenges in its implementation, the Job Creation Law is an important step in improving the quality of life for workers in Indonesia.
)* Economic Actors
