The Job Creation Law Is Considered To Solve The Problem Of 29 Million Workers Affected By COVID-19

Illustration. (Angga Nugraha / VOI)

JAKARTA - An economic observer from Padjadjaran University (UNPAD) Bandung, Rudi Kurniawan, assessed that Law Number 11 of 2020 concerning Job Creation is a solution for around 29 million workers affected by the COVID-19 crisis.

"The government has rolled out the Job Creation Law so that the issue of 29.12 million is quickly resolved," said Rudi in his written statement, quoted from Antara, Thursday, November 19.

According to Rudi, based on data from the Central Statistics Agency (BPS) for August 2020, there were a total of around 29 million workers affected by COVID-19 consisting of 2.56 million unemployed workers due to the impact of the outbreak, 1.77 million workers temporarily unemployed due to the pandemic, and the 24.03 million workers who experienced reduced working hours due to the pandemic.

Many of those laid off during the crisis will not return to work after the crisis has passed, he said, because a prolonged recession could have a permanent impact on a third of them.

"Based on research by Barrero, Bloom and Davis (2020), about a third of workers who lost their jobs during the crisis eventually became permanent unemployed," said Rudi.

The reason they become permanently unemployed is because they lose skills and long periods of unemployment due to recession change the work ethic and reduce their desire to find work.

For that, said Rudi, the government needs to issue policies to encourage the economy to return to its potential with fiscal and monetary stimulus policies. What is no less important, he continued, is the policy to overcome the unemployment problem in order to return and be ready for the job market and not become permanent unemployed.

"With the Job Creation Law, those who have been laid off get trainings so that they are honed and tune in to return to the job market," said the UNPAD Center for Economics and Development (CEDS) researcher.

The ease of business licensing and support for Micro, Small and Medium Enterprises (MSMEs) and cooperatives in the Job Creation Law, according to Rudi, can not only create jobs to absorb workers affected by the pandemic. But it also absorbs a new workforce and stimulates people to become entrepreneurs.