Impact Of The COVID-19 Pandemic, Indef: Unemployment In 2021 Will Increase To 10.4 Million People

Illustration. (Photo: Unsplash)

JAKARTA - The Institute for Development of Economics and Finance (INDEF) estimates that in 2021 the number of unemployed will increase in line with the COVID-19 pandemic which is still ongoing today.

Executive Director of Indef Tauhid Ahmad said that his party predicts that the number of unemployed people will increase by 3.6 million people to 10.4 million people in 2021 with a percentage of 7.8 percent from 4.99 percent.

The details come from 2.5 million new workforce who are not optimally absorbed and 1.1 million workforce that are still not absorbed due to the impact of COVID-19.

"The domestic industry has not yet recovered so that the absorption of new workers is still very limited. Industries will tend to employ workers who were previously dismissed or have reduced working hours," he said, in a virtual discussion, Monday, November 23.

Furthermore, Tauhid said, flexible working arrangements such as working from home and digitization that occurred during the pandemic, would reduce the need for workers, especially in the service sector.

"The latest Government Regulation regarding Manpower, as a technical regulation of Law 11 of 2020 concerning Job Creation, will be published next year, giving an indication of a wave of layoffs," he said.

According to Tauhid, the increase in unemployment has made the poverty rate rise above double digits. Therefore, he assessed, the government's economic recovery program, especially in the social protection net, must be re-evaluated.

"This is enough that we need to be criticized, although there are several programs such as the Pre-Employment Card, it is not enough to be able to hold down our unemployment rate," he said.

Tauhid explained that more massive efforts were needed to curb the increasing rate of unemployment amid the COVID-19 pandemic.

This Indef prediction, was also agreed by the Minister of Manpower Ida Fauziyah. He stated that the labor challenges were increasing due to the COVID-19 pandemic. Whereas previously, the job market in Indonesia was faced with disruption caused by automation in industry.

Ida said that due to the pandemic, the total unemployment rate is projected to reach 12 million to 13 million people.

"Indeed we have challenges, namely automation, which causes many jobs to be lost, and many new jobs to grow, so we have to carry out the transformation by filling in new jobs. The government is currently doing upskilling or reskilling," said Ida in the Grand Opening of Mega Digitalk. GNIK performed virtually, Saturday, November 21.