Mitigating Pandemic-induced Employment Crisis

AP PHOTO/FAUZY CHANIAGO

A health worker in a hazmat suit disinfects Indonesian migrant workers who have recently returned from Malaysia on 9 April 2020 before they are admitted to quarantine at Soewondo Air Base in Medan, North Sumatra.

JAKARTA, KOMPAS – The Covid-19 pandemic continues to disrupt business activities and employment. As part of its crisis mitigation, the government has reminded employers and employees to build more conducive industrial relations. On the other hand, the government is also planning to expand its assistance for the majority of employers and workers in the informal sector as well as micro, small and medium enterprises (MSMEs).

According to data published by the Statistics Indonesia (BPS), 29.12 million workers, or 14.28 percent of the country’s working age population, have been affected by the pandemic as of August 2020. The majority of workers have experienced reduced working hours and wage cuts, and some have even lost their jobs.

When the economy began to improve in early 2021, the number of affected workers declined slightly as of February 2021 to 19.1 million people, or 9.3 percent of the working age population. However, the recent surge in new Covid-19 cases has again hit the business world and employment.

“Early this year, enthusiasm for the economy was actually good. However, with the spread of the more contagious [Delta] variant of Covid-19, we became uncertain about the prospects of the labor condition during the February-July period,” Manpower Minister Ida Fauziyah told the Kompas Collaboration Forum (KCF), held virtually in Jakarta on Friday (23/7/2021).

In addition to the Manpower Minister, the discussion was also joined by a senior researcher J. Kristiadi from the Centre for Strategic and International Studies (CSIS), as well as CEOs and directors of KCF member companies.

However, with the spread of the more contagious [Delta] variant of Covid-19, we became uncertain about the prospects of the labor condition during the February-July period

According to Ida, maintaining business activities amid the pandemic means maintaining Indonesian workers. In order to avoid a prolonged labor crisis, the government, employers and workers must collaborate to solve the problem. "In a difficult condition like this, the government cannot do it alone," she said.

TANGKAPAN LAYAR

Minister of Manpower Ida Fauziyah

Ida called on businesspeople and workers to hold more dialogue to develop more conducive industrial relations. Last week, the Manpower Ministry, together with the Indonesian Chamber of Commerce and Industry (Kadin), the Indonesian Employers Association (Apindo) and leaders of confederated and federated labor unions signed a Declaration of Mutual Cooperation.

"Termination of employment (PHK) should be the last resort, after going through various efficiency processes," said Ida.

In response to the crisis, the government has also prepared a number of programs to mitigate the impacts of Covid-19 on employment. The 2021 budget for the Covid-19 handling and national economic recovery program totals Rp 744.75 trillion (US$51.50 billion).

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Ida said a portion of the budget had been allocated to fund the vaccination of workers. The government had also expanded incentives for businesses, such as tax incentives, electricity relief schemes for industrial customers, and financial assistance for micro enterprises.

The government recently revived the wage subsidy provision (BSU) for workers affected by the emergency public activity restrictions (PPKM Darurat). The subsidy is given to workers with a wage of Rp 3.5 million in regions under levels 3 and 4 of the four-tiered PPKM. The BSU is designed to prevent layoffs and to help affected companies, as well as to maintain the purchasing power of workers.

KOMPAS/ABDULLAH FIKRI ASHRI

A health worker prepares to inject the Covid-19 vaccine into a recipient at the courtyard of Gunung Jati Regional Hospital, Cirebon city, West Java, Friday (29/1/2021). In the initial stage, 2,300 health workers in Cirebon city will undergo vaccinations in the next two weeks.

Lessons

Bob Azam, director of PT Toyota Motor Manufacturing Indonesia (TMMIN), said the pandemic must be a lesson, as most Indonesians worked in the informal sector and 99 percent of their employers were MSMEs. "It\'s difficult for us to even provide social assistance," Bob said.

KOMPAS/ELSA EMIRIA LEBA

Director of PT Toyota Motor Manufacturing Indonesia (TMMIN) Bob Azam.

According to him, when designing social assistance programs and providing information, the government must realize that the majority of employers were from micro- and small-scale companies whose welfare was not much different from their workers’.

"However, from the government\'s call, there is an impression that workers and entrepreneurs are like earth and heaven. Everything is put on the employers. We have to improve this understanding of the informal sector and MSMEs," said Bob.

the government must realize that the majority of employers were from micro- and small-scale companies whose welfare was not much different from their workers’

President director of PT Krakatau Steel Tbk Silmy Karim acknowledged that the government had worked hard to overcome the pandemic. With its vast population, however, Indonesia posed different challenges.

KOMPAS/PRIYOMBODO

President director of PT Krakatau Steel Tbk Silmy Karim.

"We hope that accelerating the vaccination program can bring hope for the business world and the people as a whole," he said.

Meanwhile, Kadin deputy chairman Anton J. Supit said the country must focus on handling the pandemic. "However, underproduction should not last until the pandemic ends. There must be some who think about what happens after the pandemic is over,” he said. (AGE)

(This article was translated by Hendarsyah Tarmizi)