Celios: Job Creation Law Falis to Create Job Opportunities

TEMPO.CO, Jakarta – Executive Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, said that the Job Creation Law failed to achieve its goal of creating employment opportunities. 

“The amount of investment is up, but the comparison between investment realization and the resulting workers absorption is getting smaller,” Bhima told Tempo, Thursday, July 25, 2024.

Statistics Indonesia (BPS) noted that there’s a downward trend concerning the formal sector’s job creation in the past decade. During President Joko Widodo or Jokowi’s first term, 8.5 million people were employed in the formal sectors and the figure dropped to 2 million in the president’s second term.

Bhima explained the decline of job creation in the formal sector was attributed to the low-quality investment that came along with the promulgation of the Job Creation Law. The investment offers low wages without a work safety guarantee and no regard for the environment.

Quality global investors, on the other hand, are hampered by the decline in the standardization of living wage regulations with the Job Creation Law. On September 30, 2020, 23 labor unions and foreign companies wrote to Jokowi to reconsider the low standards in the then Job Creation Bill.

According to Bhima, these low standards are also what prevented Indonesia from benefiting much from the US-China Trade War. Foreign companies such as Harley Davidson have instead chosen to invest in Thailand and Vietnam, which continue to improve their standards.

The Labor Party or the Confederation of Indonesian Trade Unions and several labor elements are currently filing a judicial review lawsuit against the Job Creation Law.

HAN REVANDA PUTRA

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