"LEX PROSPCIT, NON RESPICIT" Hukum melihat ke depan, bukan kebelakang.
Portal UI

COVID 19 INCREASES UNEMPLOYMENT By: Prof. Erman Rajagukguk

Fakultas Hukum Universitas Indonesia > Berita > COVID 19 INCREASES UNEMPLOYMENT By: Prof. Erman Rajagukguk

Covid-19 pandemic is a breathing disease. Its characteristics, among others are: throat aches, cough and it spreads through sneezing. Body temperature increases into 38 degrees Celsius or more. As a result, the government orders the people to stay at home.

Covid 19 pandemic in Indonesia constitutes a part of coronavirus 2019 pandemic (Covid-19} which exists all over the world. This disease is caused by serious acute breathing syndrome coronavirus 2 (SARS-cOv-2). Positive case of Covid-19 in Indonesia for the first time was detected on 2nd March 2020, when two persons were confirmed to have infected by a Japanese citizen. On 9th April, the pandemic has spread to 34 provinces with the most exposed were East Java, DKI Jakarta, and South Sulawesi.

Until 2nd July 2020 Indonesia has reported 59,394 positive cases, the biggest in South-east Asia exceeding Singapore.in aspect of death rate, Indonesia was in the sixth place in Asia with an amount of 2,987 deaths. However, the actual death rate is predicted much more higher from the data reported due to no counting was made on death cases with acute Covid-19 characteristics not yet confirmed or tested. Meanwhile, it was published 26,667 people have been healed, leaving 29,740 cases being hospitalized.

The Indonesia government has tested 849,155 sample out of 273.5 citizens, which means only around 3,019 test per one million citizens, which makes Indonesia one of the lowest testing rate country in the world. As comparison, ratio of Indonesia is lower than that of Taiwan with population around 23,8 people, but having testing ratio of 3,234 per one million citizens.

As a respond to pandemic some regions/provinces have enacted big scale social limitation (PSBB. Some regions have ended PSBB period and begun new normal[1]

Employment Termination (PHK) Occurred

Many companies conducted employment termination.

Covid-19 for the first time transmitted from a Japanese citizen when he visited Jakarta with his friend aged 31 years’ old who came from Depok to attend a dancing party on 14th February 2020.

Two days later, precisely on 16th February 2020 the said Depok resident felt symptoms of queasy, cough, hard breathing and fever. In the end she came to hospital, treated and became an out-patient treatment of a medical doctor for 10 days, when she was an out-patient for 10 days  she interacted with her mother.

On 26th February 2020 the said patient and her mother aged 64 years old were treated in a hospital located in Depok. At that time the hospital staff diagnosed they suffered bronchitis disease based on the symptoms felt by her daughter aged 31 and her mother 64 years old.

On 28th February 2020 the patient who came from Japan communicated with his friend through telephone and he declared he was positive corona virus. Later on 29th February 2020 after knowing the news of his friend who was corona virus infected, finally the patient and her mother moved to Sulianti Saroso infectious disease hospital.

On 1st March 2020 the patient and her mother conducted health test against Covid-19 to be sent to Litbangkes (Health Development Research, an institution under the Ministry of Health) and eventually on 2nd March 2020 came out the result which confirmed that the patient and her mother were virus Corona positive.

From exactly such occurrence Indonesia entered as one of the country in the list of countries in the world Covid-19 infected. Effectively until Tuesday 14th April 2020 at 09.00 WIB (Indonesia Standard Western Time) there have been 212 countries infected by this Covid-19 with 1,773,084 confirmed cases, 6.3 percent stated died.

In Indonesia alone until Tuesday 14th April 2020 4,557 cases were reported confirmed  with 8.8 percent died (399 persons), recovery cases 8.3 percent (380 persons) and in-treatment cases of 82.9 percent (3,778 persons).

With Indonesia condition which is in the most critical moment, what about the workers? Does unemployment become   more increasing or   on the contrary?

Due to existing Corona virus at present many companies located in Indonesia cease their operation activities so that many workers lost their work. One of the examples in Jakarta Covid-19 pandemic has caused some workers underwent employment termination (PHK).

It is reported there are more than 11,000 companies encounter problems so that ten thousand workers were inactive asked to stay at home without pay, even there are more than 16,000 workers their employment were   terminated (PHK).

As an example, one of the tourism places being closed, namely the National Monument (Monas) caused by rampant Corona virus, in-operational since 23rd March 2020 until 5th April 2020.

However, because Corona virus spread continue to increase in this country that temporary close-down of the National Monument is extended until the date of 19th April 2020. As we all know, tourism is one of the most employment creating business sector.

If we think it seriously on the state condition at present it seems tourism sector is no longer the source of income for society whose economy depended on tourism sector. As we have all known, when a person loses his/her job then automatically he/she will become unemployed.

Other companies which was affected by Covid-19 impact is Ramayana Plaza Depok, West Java that totally has closed down its business, terminated employment of all workers unilaterally because of sales decrease that eventually the company gained no profit. This can add up the number of people unemployed then impacted the unemployment level.

Another example is a hotel located in Sukoharjo begins to decrease its activities asking some workers not to work, stay at home, this action is one of many ways to cut expenditure, even there is one of the hotels was forced temporarily to be out of business because of no visitors, certainly caused the hotel income decreasing.

Chairperson of Indonesia Sukoharjo Hotel and Restaurant Association (PHRI) Oma Nuryanto said, “Hotel occupancy level falls due to Covid-19 pandemic and status of extra-ordinary condition (KLB) of such virus in Sukoharjo”[2].

Until 20th April 2020 Labor Ministry reported workers of informal sector whose employment have been terminated were 1,304,777 persons, excluding those who were asked to stay at home.  The projection of Center of Reform on Economics (Core) Indonesia disclosed, the number of open unemployment nationally on quarter II-2020 can increase 4.25 million persons for low scenario, to become 6.68 million persons in intermediate scenario and 9.35 million persons in the worst condition. There are seven sectors mostly impacted, namely garment/textile, restaurant, transportation, manufacture, hotel, construction, goods/services trade.[3]

The Government projected there will be a significant potential of poverty level increase and the number of new unemployment in Indonesia, due to Covid-19 pandemic its number can reach millions of people.

Coordinating Minister of Economy Airlangga Hartanto said Covid-19 has changed global economy drastically. Global recovery optimism instantly changed into post pandemic Covid-19 recession threat.

Post pandemic Covid-19 recession threat not only will take place in Indonesia, but also in many countries such as USA, Japan, and India.

“In financial sector Indonesia has witnessed capital outflow occurred (foreign funds go out of the country). To national economy, its revision range was 2.3%. It affected to the surge of poverty and unemployment,” Airlangga explained.

Airlangga explained, based on the scenario calculated by the government, unemployment level will rise. Mostly it happened in Java Province which Airlangga thought as the heaviest, Sumatera, Bali, and Nusa Tenggara.

“This reflects that open unemployment level, based on planning which has decreased 5.18%, will rise into 7.33% and poverty level from 9.1% into 9.59%,” said Airlangga.

In quantity, the government projected in case of heavy and the heaviest scenario during Covid-19 pandemic against addition of poverty and unemployment.

  1. In Heavy scenario, there will be addition of 1.16 million poor people and addition of jobless people up to 2.92 million people.
  2. In The heaviest scenario, there will be addition of 3.78 million poor people and addition of unemployment of 5.23 million people.

Note of Labor Ministry (Kemenaker), until 13th April 2020 there have been 2.8 million people whose employment terminated, and asked to stay at home due to Corona pandemic, then automatically they added the list of unemployment in Indonesia.[4]

In Indonesia, Sri Mulyani predicted Corona pandemic would add up the number of unemployment 5.2 million people in the heaviest scenario.

Early of this week, General Director of Development, Training and Productivity of Labor Ministry B. Satrio Lelono recorded the number of workers affected by employment termination (PHK) and asked to stay at home had reached 2.8 million because of Corona pandemic.

Previously, President Joko Widodo (Jokowi) requested all business actors to try hard defending their workers although at present business was obstructed by Corona virus pandemic. Furthermore, he also asked all parties helped and worked together, giving assistance to those who were unable to provide their own basic necessity.

“Let’s perform mutual help nation-wide to maintain development achievement and utilize it to act a jump for progress,” he said.

For information, a number of companies now are undergoing serious pressure due to Corona virus spread. For example, the serious pressure suffered by business actors in hotel sector.

Indonesia Hotel and Restaurant Association (PHRI) mentioned 1,266 hotels closed down due to the spread of the pandemic. On that situation, there were more than 150 thousand employees were affected.[5]

Covid-19 pandemic created unemployment termination wave aka PHK in Indonesia. Finance Minister Sri Mulyani Indrawati also highlighted the increasing number of people who lost their jobs due to rampant disease caused by this Corona virus.

“Workers asked to stay at home, mainly from April, recorded as 1.2 million of workers in informal sector,” said Sri Mulyani in teleconference video in Jakarta, Friday 17th April 2020.

She disclosed the sign of employment termination wave of workers has taken place in the Motherland. That can be seen from payment of Income Tax (PPh 21) for Old Age Security or retirement which is increasing up to 10.12% on March 2020 compared to that of March 2019.

That figure is the highest growth occurred during the first quarter. “It indicates a decrease of employment force number. This growth does not mean that it is good, because it is associated with PHK (employment termination),” she said.

Then how about the fate of informal workers? Its number is more difficult to count. However, this Ex Executive Director of the World Bank predicted around 256 thousand informal workers got affected by social limitation policy due to Corona virus.

On the contrary, Bhima Yudhistira projected at least 2.5 million people underwent PHK (employment termination) in this year. “That excludes those asked to stay at home (inactive employees) but still holding worker status,” said the researcher of Institute For Development of Economics and Finance to Katadata.co.id.

All over the world, International Labor Organization or ILO predicted 1.25 billion people work in sectors seriously got affected by Corona and under possibility of PHK (employment termination) risk. Those sectors include accommodation and meal service, retail and big trade, including vehicle repair service, manufacture, and property or real estate.

If it is not anticipated the explosion of this unemployment figure will increase the poverty level. Sri Mulyani predicted Corona virus could cause an increase of poverty up to 1.1 million people. On worst scenario, poverty addition even could reach 3.78 million people.

In September 2019, BPS (Central Statistics Bureau) recorded poor citizens was 24.79 million people or 9.22%. Poverty figure for the first time reached single digit in March 2018, namely 9.82% or 25.95 million people.[6]

Unemployment Increases

In heavy scenario, the government considered economic growth was at the level of 2.3% with potential figure of aroun2.9 million people. While in very heavy scenario, national economic growth will be minus with potential figure of unemployment to reach more than 5 million people.[7]

The result of data process of 2019 National Work Force Survey (SAKERNAS) reveals, at present the highest unemployed is SMK (vocational school) graduates, its equivalent (10.42%), and the lowest post-graduate university (1.93%).[8]

Finance Ministry predicted the number of unemployment in Indonesia would rise significantly in line with the 2020 economic growth sluggishness potential. Economic sluggishness due to corona Covid-19 pandemic is estimated to add 5 million unemployed in the very heavy scenario which had been assessed by the government.

According to the data of Central Statistics Bureau (BPS) per August 2019 there were around 7.05 million of unemployment equal to 5.28%. If it increases 5 million, then total unemployment in 2020 could reach 12.05 million persons.[9]

Efforts to Overcome

During Covid-19 pandemic the government conducted changes to pre-work card (kartu prakerja) in order to be helpful/functional for workers suffered employment termination (PHK) or the work force who just graduated from education. The budget was multiplied into Rp20 trillion so that it can widen its assistance scope. Moreover, the total assistance obtained was Rp3.55 million with details of Rp600 thousand for training cost per month for 4 months with a total of Rp2.4 million and Rp1 million as training cost incentive, and Rp50 thousand as survey cost. The training which at the beginning also include face-to face interaction, now it was held totally online (daring).

It is expected by expanding the budget for pre-work card, assistance receiver can increase from 2 million into 5.6 million persons.

By issuing Pre-Work Card which was earlier in the month of April 2020, considering the pre-work card was also affected in encountering the Corona virus pandemic seriously into Indonesia economy, therefore the government had high hope that this card could provide convenience and solution through worker cards, such as:

[1] Id.wikipedia-org-Pandemic Covid-19 in Indonesia

[2] The more increase of unemployment level in the midst of Covid-19 pandemic, sukabumiupdate.com

[3] Labor Day Full of Anxiety, Kompas, 30 April 2020.

[4] Corona triggered 5 million Unemployment, 3 million Indonesians became poor, Cantika Adinda Putri, CNBC Indonesia, 14 April 2020.

[5] Sri Mulyani highlighted World Unemployment Surge due to Coronna. CNN Indonesia, 17 April 2020.

[6] Serious Challenge Overcoming Unemployment Wave Due To Corona, Pingit Aria, Katadata.com, 20 April 2020.

[7] Because of Corona Pandemic Unemployment Is Predicted To Increase Five Million People. Rakyat Merdeka.co.id, 21 April 2020.

[8] The Fight of Unemployment Due To Corona, Lokadata.id, 30 April 2020.

[9] The Government Predicts Unemployment To Increase 5 million people Due To Corona. Vincent Fabian Thomas, http//irto.id/ePHK, 20 April 2020.

Source: http://www.ermanhukum.com

About the author

➖ Kampus UI Depok Jl. Prof. Mr. Djokosoetono, Kampus FHUI Gedung A Depok 16424, Jawa Barat Telepon (021) 7270003, 7863288 Faks (021) 7270052. E-mail: humas-fh@ui.ac.id & lawschool@ui.ac.id ... ➖ Kampus UI Salemba Gedung IASTH Lt. 2, Jl. Salemba Raya No.4, Jakarta 10430 Tel : (021) 31909008 Faks : (021) 39899148