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Controversy Analysis Rolled Out Copyright Law in the Era of Pandemic Covid - 19
Linked To Investment Needs And Job Creation in Indonesia
Sa'adah, Daniel Nababan, Silviana, Dini Arwati, Fitri Sukmawati, Khairul Shaleh
1 Widyatama University, Bandung2Widyatama University, Bandung 3Widyatama University, Bandung 4Widyatama University, Bandung 5Widyatama University, Bandung 6Widyatama University, Bandung 1saadah.5507@widyatama.ac.id
Article History: Received: 10 January 2021; Revised: 12 February 2021; Accepted: 27 March 2021; Published online: 20 April 2021
Abstract: In early 2020 there was a pandemic caused by coronavirus. The spread of this virus led to the enactment of a
lockdown policy to prevent the spread of the virus. This policy brought economic activity to a standstill, which influenced the level of investment, employment absorption, rising unemployment, decreased purchasing power of the community, and the rollout of employment laws. This study aims to find out the linkages of policies issued by the law - copyright law in the middle of the pandemic COVID is linked to the declining economic condition of many factors during this pandemic and what strategies must be done to overcome stalled economic activities. The method used is descriptive analysis. The results showed that there is a relationship between declining economic conditions and the issuance of labor laws. The strategy is to provide tax relief, credit suspension, wage subsidies, and provide stimulus to the business sector activities.
Keywords: pandemic covid, investment, industry, unemployment, copyright law, strategy
1. Introduction
1.1. Background
The COVID-19 outbreak has had a serious impact on almost all countries in the world, including Indonesia. The effect is not only on one field, but almost all activities. One of the aspects of concern in the midst of the corona virus outbreak is investment. The existence of various restrictions in a country certainly has an impact on economic activity.
The Investment Coordinating Board or BKPM itself has acknowledged that coronavirus or COVID-19 is a serious threat that will sooner or later affect the stability of a country, including Indonesia. According to Rizal Calvary Marimbo, a member of bkpm's Investment Committee for Communication and Information, the decrease in investment value will be very noticeable when viewed from trade relations involving the epicenter countries of COVID-19, one of which is the PRC.
The existence of restrictions or lockdowns makes trading activities affected with a small loss value. This activity includes all business activities related to the supply of material materials directly related to the PRC, both export and import.
BKPM stated that the impact of investment resulting from the spread of the COVID-19 outbreak can only be known in late March or early April. The impact is almost certainly there, considering that the PRC is currently the country with the second largest realization of foreign investment in Indonesia in the last year. Last year, the value of PRC investment in the country was not less than USD 4.7 billion. The nominal is equivalent to almost 17% of the total value of foreign investment in Indonesia.
Predicted Impact of Investments Reaching Hundreds of Trillions
From the total investment value mentioned in the previous point, the potential impact of investment in Indonesia could reach trillions of rupiah. The Institute for Development of Economics and Finance (INDEF) predicts that there is a potential loss of investment value of Rp127 trillion due to the outbreak of COVID-19. This is not without reason, considering one of the contributing factors is the prospect of activity and economic growth that is increasingly depressed.
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This is strengthened by the government which states that any decrease in the economic value of the PRC of 1% will have a decreased impact on the Indonesian economy by 0.3%. Given the evolving situation, it is unlikely that the PRC economy could slump to 5% by 2020.Who Is Most Affected?
The International Labour Organization (ILO) also predicts that the Corona pandemic will cause more than 20 million people worldwide to lose their jobs. This is equivalent to the conditions in the global financial crisis that occurred in the range of 2008-2009, where the number of world-level unemployed reached 22 million people.
From the description above, it is very important for investors or investors to maintain, follow, and analyze the development of COVID-19. With proper observation and calculation, total losses and adverse effects can be minimized as little as possible.
Industrial Sector Affected by Corona
According to research from Moody's the most affected industries are divided into 3 parts. The first part that is most affected is quite high, namely industries such as garment, automotive, automotive suppliers, consumers, tourism, airlines, to shipping.
In the second part moderately affected are beverage industry, chemical, manufacturing, media, metals and mines, oil and gas, property, agricultur to hardware technology companies.
In the third part affected is rather minimal are industries such as construction, defense, equipment, transportation, pharmaceuticals, packaging, food retail to telecommunications.
Corona's Impact on Industry
The industry is one of the largest contributors to Indonesia's Gross Domestic Product (GDP) in the last year. The contribution made by the industry in 2019 gdp was recorded at 19.62%. These contributions are well above Trade, Agriculture, Construction to Mining.
According to data compiled from the Central Bureau of Statistics (BPS) during February 2020 the value of imports from all categories of goods decreased compared to January 2020. Starting from the import of consumer materials decreased 39.91%, then imports of raw materials / helpers fell 15.89% to capital goods fell 18.03%. It also proves that the decline in imports of raw materials in the country is sluggish.
This decrease will also appear because there are restrictions on all forms of activities outside the home to prevent the spread of COVID-19 which ultimately impacts economic activity and makes the money turnover slower.
The Impact of Corona on MSMEs
Small and medium-sized businesses (MSMEs) are also getting economic shocks caused by the COVID-19 pandemic. The lockdown measures have stopped economic activity abruptly, with declining demand and disrupting supply chains around the world. In the initial survey, more than 50% of MSMEs indicated that they could roll out in the next few months.
The impact of the COVID-19 pandemic on the MSME sector is certainly very influential to the condition of Indonesian economy where the contribution of MSMEs to the Indonesian economy is very large in various fields, among others:
(1) The number of Business Units in Indonesia as of 2018 totals 64.2 Million business units, with the number of MSMEs business units amounting to 64.1 Million (99.9%)
(2) Contribution to the number of Workers, The number of workers in Indonesia as of 2018 totals 120.6 Million people, with the number of workers in MSMEs amounting to 116.9 Million (97%)
(3) Contribution to GDP, Total contribution of business GDP in Indonesia as of 2018 total 14,038,598 Billion, with the contribution of MSMEs to GDP of 8,573,895 Billion (61.07%) .
(4) Contribution to Non-Oil and Gas Exports Total non-oil and gas exports of Indonesia as of 2018 total 2,044,490 Billion, with the contribution of MSMEs to non-oil and gas exports amounting to 293,840 Billion (14.37%).
(5) Contribution to Investment, Total investment in Indonesia as of 2018 total 4,244,685 Billion, with the contribution of MSMEs to investment of 2,564,549 Billion (60.42%).
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Source : Databoks . said data co.id / data publish / 2020/10/9 / Developments- latest – covid 19 – in – Indonesia.
1.2. Identification of Problems
Based on the description and graph above shows that the case of covid 19 has been since eight months ago starting from March 2020 until October 2020 has not shown a decrease in the number of cases, it shows an increasing trend, along with the increase in cases of impact has been strongly felt by the people of Indonesia and in various sectors of economic activity, can be seen from the description above affected including the decrease in investment , the industry sector experienced a decrease in production activities, and impacted on the reduction of workers, on the other hand that did not escape also from the impact of covid 19 is MSMEs and informal sectors. which also has an impact on the increase in the number of unemployed in the land of water is quite alarming. In connection with the various problems that arise, In October 2020 rolled out the copyright law that has been passed by the government. 2. Library review 2.1. Investment Theory
Investment is essentially the beginning of economic development activities. Investments can be made by private, government or cooperation between government and private sector. Investment is a way that can be done by the government to increase economic growth and for the long term can raise the standard of living of its people (Mankiw, 2003). Investments include the addition of capital stock or goods in a Country, such as buildings, production equipment, and inventory items within one year. Investment is a step to sacrifice consumption in the future (Samuelson 2004; Isabirye Moloi, 2019). According to Sukirno (2005) investment activities allow a society to continuously increase economic activities and employment opportunities, increase national income and increase the level of prosperity of the community. This role is derived from three important functions of investment activities, namely:
(1). investment is one component of aggregate expenditures, so the increase in investment will increase aggregate demand, national income and employment opportunities,
(2). the increase of capital goods as a result of investment will increase production capacity.
(3). investment is always followed by the development of technology. Based on some opinions from experts, it can be concluded that investment or investment is a process of expenditure or expenditure that can be in the form of capital goods, buildings, capital equipment and inventory goods used to increase work productivity that will eventually increase the output produced from the production process both government and private.
Based on the type of investment divided into two types namely; investments made by the government or better known as Government Expenditure. both investments made by private parties. Private investment funds according to its origin consists of 2 kinds of Domestic Investment conducted by the national private sector and Foreign Investment conducted by foreign investors. in general, investments made by the government are not intended to gain a profit while investments made by private parties aim to seek profit and earn income.
2.1.1. Domestic Investment
Domestic Investment is an activity to invest to conduct business in the territory of the Republic of Indonesia conducted by domestic investors using domestic capital. Provisions on Investment shall be stipulated in Law No. 25 of 2007 concerning Investment. Domestic investors can be made by individual Indonesian citizens, state business entities, and/or state governments that invest in the territory of the Republic of Indonesia. Business
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activities or types of businesses are open for investment activities, except for business fields or types of businesses that are declared closed and open with the requirements and limitations of state capital ownership in the field of business of the company is regulated in Presidential Regulation No. 36 of 2010 concerning Changes in the List of Closed Business Fields and Open Business Fields with Requirements in the Field of Investment. The implementation of national economic development is to enhance the prosperity of the people, capital is a very important and decisive factor, it is necessary to organize fertilization and utilization of domestic capital by means of rehabilitation, renewal, expansion, development in the field of production of goods and services. Investment, investment or investment in a business with the aim of profiting from the business. Investment as a vehicle where funds are placed in the hope to be able to maintain or increase the value or give a positive result.
2.1.2. Foreign Direct Investment
Foreign Investment (PMA) is a form of investment by way of building, buying a total or acquiring a company. Investment in Indonesia is regulated by Law No. 25 of 2007 on Investment. In this Law, what is meant by Foreign Investment is the activity of investing to conduct business in the territory of the Republic of Indonesia conducted by foreign investors, either using foreign capital completely or in relation to domestic investors (Article 1 of Law No. 25 of 2007 on Investment). Foreign Investment (PMA) has more advantages including its long-term nature, giving a lot of contribution in technology transfer, transfer of management skills, opening new jobs. These jobs are very important for developing countries given the limited ability of the government to provide jobs. Wiranata (2004) argues that foreign direct investment can be considered as one of the important sources of economic development capital. All countries that adhere to the open economic system, generally require foreign investment, especially companies that produce goods and services. Furthermore, Salvatore (2007) explained that PMA consists of:
Portfolio investment ( portfolio investment) namely: investments involving only financial assets such as bonds and stocks nominated or valued in national currency. Investment portfolio activities usually take place through financial institutions such as banks or companies and so on.
Foreign direct investment is: investment that includes investment into assets in the form of the construction of factories, hotels, procurement of various kinds of capital goodsbuying land and so forth. The definition of foreign investment (PMA) among others as a means of foreign payment that is not part of Indonesia's foreign exchange wealth, which with the approval of the government is used for corporate financing in Indonesia, while according to Krugman (2004) referred to as FDI is an international capital flow in which companies from a country establish or expand their companies in other countries. Therefore, not only the transfer of resources, but also the enforcement of control over companies abroad. It can be concluded that Foreign Direct Investment or what we know as FDI is a process or way of investing abroad. What is meant by FDI is where multinational companies build their subsidiaries in other countries, which become export destinations to facilitate export-import activities and also save costs. There are several conditions why a multinational company conducts FDI to the export destination country is to save transportation costs ,There are obstacles from the government of the export destination country. Hope to employ the locals. FDI (Foreign Direct Investment) is one of the evidence that the economy has become more global. This began when a multinational company from one country invested in a company in another. This way companies in the home country can control the companies in the country of investment destination (Host Country) either in part or in whole. Typically, FDI is related to the investment of productive assets, such as the purchase of land, equipment, and buildings or the construction of new factories carried out by companies that will invest. Basically Foreign Investment for Indonesia serves as a source of capital funds used to accelerate investment and economic growth. It also plays an important role in the use of funds for structural improvement to be better. As well as assisting in the industrialization process that is being implemented. . Helps in the absorption of more labor so as to reduce unemployment. As well as being able to improve the welfare of the community. It is also a reference to make Indonesia's economy even better than before. And the most important is the increase in the country's foreign exchange reserves with taxes provided by investors. The purpose of foreign investors to invest is to get profit in the form of low production costs, local tax benefits and others. As well as being a trading hurdle for other companies. There are several factors that can hinder the entry of foreign investment, among others: Political Instability and Security.. The number of cases of demonstrations / strikes in the field of employment. . Misconceptions about the implementation of the Regional Autonomy Law and incomplete and clear guidelines concerning the procedures for the implementation of regional autonomy. Lack of guarantees of legal certainty, as well as weak law enforcement. Lack of guarantee / protection investment. The lifting of various incentives in the field of tax, the still rampant practice of KKN .as well as indonesia's bad image as a bankrupt country, the disintegration and the absence of law effectively further deteriorate Indonesia's competitiveness in attracting investors to conduct its activities in Indonesia. As well as the low quality of competent Human Resources. Therefore, it is necessary to transparency the financial market in reliable information that flows
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in a stable flow so that investors are interested in investing their funds. The absence of transparency during the investment process can severely limit the attention span of foreign investors. Open financial markets should be exempt from direct government control and insider trading. The rule of law of economists has been agreed upon. Flexible exchange rates. Making it easier for investors to invest
2.1.3. Capital Expenditures
Government expenditure is part of fiscal policy (Sadono Sukirno, 2000), which is a government action to regulate the course of the economy by determining the amount of government revenues and expenditures annually, which is reflected in the documents of the State Budget for national and Regional Budget revenues for regions or regions. The objective of this fiscal policy is to stabilize prices, output levels, and employment opportunities and spur or encourage economic growth. In Keynes's opinion in Sadono Sukirno (2007) that the role or intervention of the government is still indispensable, namely if the economy is fully regulated if activities in the free market, not only the economy does not always reach the full level of employment opportunities but also the stability of economic activities can not be realized. However, fluctuations in economic activity are wide from one period to another and this will have serious implications for employment opportunities, unemployment and price levels.
According to Guritno (2009), Government Spending reflects government policy. If the government has established a policy to buy goods and services, the government's expenditure reflects the costs that must be incurred by the government to implement the policy. Theories about government spending can be classified into two parts, namely macro theory and micro theory. In this study put forward the theory from the macro side. Macro theories about the development of government spending are put forward by economists and can be classified into three groups, namely the development model of the development of government spending, Wagner's law on the development of government activities, peacock and wiseman theory. The development model of the development of government expenditure was developed by Rostow and Musgrave which connects the development of government spending with the stages of economic development that are distinguished between the early, intermediate, and advanced stages. In the early stages of economic development, the percentage of government investment to the total investment is large, because at this stage the government must provide infrastructure, such as education, health, transportation infrastructure, and so on. Then in the middle stage of economic development, government investment is still needed to increase economic growth in order to take off, but at this stage the role of private investment investment has grown. The role of government remains large in the middle stage, because the increasingly large role of the private sector causes a lot of market failure, and also causes the government to provide large quantities of public goods and services and better quality. In addition, at this stage economic development causes the relationship between sectors to be more complicated. For example, economic growth caused by the development of the industrial sector, resulting in higher levels of air and water pollution, and the government must intervene to regulate and reduce the negative consequences of pollution on the community. The government must also protect workers who are in a weak position in order to improve their welfare.
Musgrave argues that in the development process, private investment in a percentage of GDP (Gross Domestic Product) is getting bigger and the percentage of government investment in percentage to GNP will be smaller. On a further economic level, Rostow states that economic development, government activity goes from providing infrastructure to spending - spending on social activities as well as old-age welfare programs, public health care programs, and so on. Musgrave and Rostow's theory of the development of the role of government is a view based on the economic development experienced by many countries.
2.2. Employment Theories
2.2.1. Adam Smith's Classical Theory
Adam smith (1729–1790) was the main figure of the economic tradition that came to be known as the classical tradition. In this classic theory Adam Smith also sees that effective allocation of human resources is a beginner to economic growth. Once the economy grows, the accumulation of capital (physical) is only beginning to be needed to keep the economy growing. In other words, effective allocation of human resources is a necessary condition for economic growth.
2.2.2. Malthus Theory
After Adam Smith, Thomas Robert Malthus (1766–1834) was considered a classical thinker who was highly meritorious in the development of economic thought. Thomas Robert Malthus revealed that humans develop much faster than the production of agricultural produce to meet human needs. Humans develop according to the measuring series, while food production only increases according to the calculated series. Malthus also argues that a high population must result in a decrease in head production and the only way to avoid this is to control or supervise population growth. Some of the ways out offered by malthus are to delay the marriage age and reduce
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the number of children. If this is not done then the reduction of the population will be solved naturally, among others there will be wars, epidemics, food shortages and so on.
2.2.3.. Keynes Theory
John Maynard Keynes (1883-1946) argues that in reality the labour market does not work according to the classical view. Wherever the workers have a kind of labor union that will try to fight for the interests of workers from lowering the wage rate. Even if the wage level is lowered but this possibility is considered very small keynes, the level of income of the community will certainly fall. The decrease in income of some members of the public will lead to a decrease in the purchasing power of the community, which in turn will lead to reduced overall consumption. Reduced purchasing power of the community will drive down prices. If prices fall, then the marginal value of productivity of labor that is used as a benchmark by employers in hiring labor will fall. If the price drop is not so great then the productivity value curve only drops slightly. However, the growing number of workers is still smaller than the number of workers offered. Even worse, if prices fall dramatically, this causes labor's marginal productivity curve to drop dramatically, and the number of workers accommodated becomes smaller and unemployment becomes more widespread.
2.2.4. Harrod-domar Theory
Harod-domar Theory (1946) is known as growth theory. According to this theory investment not only creates demand, but also enlarges production capacity. Growing production capacity requires greater demand so that production does not decrease. If enlarged capacity is not followed by large demand, a surplus will arise and be followed by a decrease in the amount of production.
In The Theory of Labor One of the common problems in the labor force is the imbalance of demand for labor and supply of labor, at a wage level. The imbalance is a greater supply of excess supply of labor or greater demand than excess demand for labor in the labor market.
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Image Caption : SL = Supply of labor DL = Demand for labor W = Wages (wage) L = Number of labor Image caption:
(1). The number of people who offer their labor to work is the same as the number of workers requested, which is each as large as Le at the wage level of balance We. Thus, the point of balance is point E. At the wage level of balance We, everyone who wants to work has been able to work. Then not an unemployed person. Ideally this situation is called full employment at the wage level We.
(2). In the second image, there is an excess supply of labor. At the W1 wage level, the labor supply (SL) is greater than the demand for labor (DL). The number of people who offer themselves to work is as much as N2, while the requested is only N1. Thus, there are people who are unemployed at the W1 wage level as much as N1N2.
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(3). In the third image, there is an excess demand for labor. At the W1 wage level, the demand for labor (DL) is greater than the supply of labor (SL). The number of people who offer themselves to work at the W1 wage level is as much as N1, while the requested is as much as N2.
2.2.5. Factors Affecting Labor Demand a. Wage Level
What affects the high cost of production of the company is the level of wages of the workers. The increase in wage rate will result in an increase in production costs, thus increasing the price per unit of the resulting product. When the price per unit of products sold to consumers rises, the reaction that usually arises is to reduce the purchase or even no longer buy the product. So there will be a change in the production scale called the scale effect where a condition that forces the manufacturer to reduce the number of products produced, which can further reduce the company's workforce. A wage increase assuming the price of other capital goods remains, then employers have a tendency to replace labor with machines. The decrease in the number of workers due to replacement with the machine is called substitution effect.
b. Technology
The use of technology within the company will affect how much labor is needed. Technological sophistication alone does not necessarily result in a decrease in the number of workers. Because it can happen technological sophistication will lead to better production results, but its ability to produce products in the same quantity or relatively the same. More influential in determining labor demand is the ability of machines to produce products in much greater quantities than human capabilities. For example, packaging machinery of food products that were once based on human labor and switched to machines and robots will affect the lower demand of human labor to produce such food.
c. Labor productivity
How much labor is requested can be determined by what level of productivity of the workforce itself. If to complete a particular project it takes 50 employees with standard productivity who work for 9 months. But with employees whose productivity exceeds standards, the project can be completed by 25 employees within 9 months. We know that the strength of labor demand in certain jobs depends in part on productivity (MP). Companies control most of the factors that determine worker productivity. But two ways unions can influence workers' hourly pay is to participate in a combined labor productivity management committee—often called a "quality circle"—and "codetermintation," which consists of workers' direct participation in company decision-making. The former was also sometimes called "labor democracy". The objectives of both approaches are to improve internal communication within the company and increase productivity through more emphasis through more cooperation and profit incentives. In many cases, unions have rejected participation in the circle of quality and codetermintation, arguing that these programs streamline the bargaining process and diminish union authority. In another example, the union agreed to participate on an experimental basis. Until such time as their approach increases the marginal product of labor, demand for labor will increase, thus improving the prospects for unions to negotiate wage increases.
d. Labor Quality
This discussion of quality is closely related to the discussion of productivity. Because with a quality workforce will cause its productivity to increase. The quality of this workforce is reflected in the level of education, skills, experience, and maturity of the workforce in work.
e. Capital Facilities
In practice production factors, both human resources and non-natural resources and others, such as capital can not be separated in producing goods or services. In an industry, assuming other production factors are constant, the greater the capital invested the greater the demand for labor. For example, in a drinking water industry, assuming other factors are constant, then if the company increases its capital, then the number of workers requested also increases.
3. RESEARCH OBJECTIVES AND BENEFITS 3.1. Research Objectives
Based on the description that has been presented in the background above, this study aims to find out the linkages of policies issued by labor laws in the midst of the pandemic covid linked to the declining economic condition of many factors including investment, production and employment problems.
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3.2. Benefits of ResearchWith this research is expected to add to our insights about the relationship between variables - variables in macroeconomics and understand about macro problems faced by the Indonesian economy, especially during the pandemic covid 19 and expected advice from readers for indonesia's economic recovery, so that it is better in the future with stable economic growth supported by economic & political stability so that investment can increase and there is investor confidence , Thus, there will be an increasing rate of employment absorption in line with the high rate of job seekers in Indonesia. So it is expected to overcome the problem of unemployment and lower the level of criminality.
4. RESEARCH AND DISCUSSION METHODS 4.1. Research Methods
The method in this research is to use descriptive analysis method. Descriptive analysis is an analysis that is done to assess the characteristics of a data. The data used in this study are investment data, labor absorption, unemployment, in the period October 2019 – October 2010. This research aims to find out the linkages of the policy of issuing a copyright law in the middle of the pandemic covid. Copyright law or Law No. 11 of 2020 on copyright is a law in Indonesia that has been passed on October 5, 2020 by the House of Representatives and implemented on November 2, 2020 territorial reach throughout Indonesia.
4.2. Discussion
This weakening economic performance also has an impact on the employment situation in Indonesia. SMERU Research Institute, an independent institute conducting research and public studies, in August 2020 released their policy note entitled "Anticipating the Potential Impact of the COVID-19 Pandemic Crisis on the Employment Sector". In the note, smeru research team underlined that there are at least two implications of indonesia's economic crisis in the employment sector. First, an increase in the number of unemployed, and second, a change in the landscape of the after-crisis labor market.
Unemployment rises
Hampering economic activity automatically makes businesses make efficiencies to reduce losses, as a result, many workers are homeless or even laid off (layoffs).Based on data from the Ministry of Manpower (Kemnaker) as of April 7, 2020, due to the Covid-19 pandemic, there were 39,977 companies in the formal sector who chose to house, and laid off their workers. A total of 1,010,579 workers were affected. In detail, 873,090 workers from 17,224 companies were housed, while 137,489 workers were laid off from 22,753 companies. Meanwhile, the number of companies and workers affected in the informal sector was 34,453 companies and 189,452 workers. However, in its policy notes, the SMERU research team said that this figure does not yet describe the overall unemployment rate because it has not included unemployment from the informal sector and the new labor force that is still unemployed. Smeru's research team then simulated the calculation of total unemployment increase and calculated the amount of reduction in employment absorption from each business sector due to economic contraction until the end of March 2020. Citing SMERU policy notes, the simulation results show that the TPT (Open Unemployment Rate) increased from 4.99 percent in February 2020 (BPS data) to around 6.17 percent– 6.65 percent in March 2020. This percentage is equivalent to an increase in the number of reductions in the absorption of labor that reaches about 1.6 million to 2.3 million people. Judging from the spread of the sector, trade is the sector that has experienced the most reduction in labor absorption. Estimates show that the employment absorption in the sector decreased by approximately 677,100–953,200 people. However, when viewed from the proportion, construction is the sector that reduces the absorption of labor with a proportion of 3.2 percent–4.5 percent of the number of workers in the sector in February 2020. However, there are sectors that are expected to still absorb the workforce, such as education, information and communication services, health services and social activities, as well as financial and insurance services. This is likely because in the first quarter of 2020, the sector's gross domestic product (GDP) increased compared to the same period in 2019.
Post-crisis labor market
Smeru's research team said that there are at least four main points that will drive changes in the labor market landscape after the economic crisis and the Covid-19 pandemic.
First, the absorption rate of labor will not be as large as the number of workers affected by layoffs. This unabated labor gap will then fall into the unemployment group. What is the effect in terms of post-crisis economic recovery? Muhammad Adi Rahman, SMERU researcher and head of the research team that compiled this policy record, said that it is likely that unemployment, both the new labor force and those laid off due to the crisis, will work in the informal sectors. "Therefore, what needs to be anticipated in developing a post-crisis economic recovery program is expected to also lead to informal sectors so that their productivity can be improved," Adi said
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in a written interview with Kompas.com, Monday (10/08/2020). He said it was necessary because if workers' productivity could be improved, it was expected that their wage levels would also be better. "Even if this business can grow, it is expected to also open jobs so that it can absorb the middle of work," he said. Second,the company will only recruit workers who have high productivity and are able to do several tasks at once (multitasking). For example, hospitality businesses will only recruit workers who have managerial skills and can also serve guests in the restaurant section. This is quite common in fact, even since before the pandemic hit. However, these prerequisites will be increasingly needed by companies in the post-crisis recruitment process. Adi said the current pandemic is a kind of opportunity for some businesses to move from previously labor-intensive to capital-intensive. "This crisis situation seems to be a learning for businesses to make efficiency. This is because in this crisis situation, they still have to bear the burden of wage costs even though production activities are disrupted or temporarily halted," said Adi. According to him, efficiency with an increasing proportion of capital compared to workers, becomes the consideration of businesses to improve the financial condition of the company in the future. In addition, it is also to anticipate the risk if one day a similar situation of this pandemic occurs again.Third,businesses that will develop after the Covid-19 pandemic are technology-related businesses. The required workforce is also a workforce that has capabilities in the field of technology. This is evidenced by the shift in work patterns during the pandemic. If previously workers were expected to work in the workplace, then during this pandemic the company also workers had to adapt to reduce their activities, especially those involving meeting many people. One way is by applying work from home (WFH) work patterns. According to Adi, the current pandemic can be said to be a catalyst in the process of technology adoption in the community. Similarly, in business processes in companies that begin to consider moving from labor-intensive to capital intensive. In these capital-intensive companies, a workforce capable of operating machinery is required, or in other words has a higher mastery of technology. "So are other businesses. For example, retail businesses in the future may use online platforms more massively, where this requires a better level of digital literacy and information than ever before," said Adi.
Fourth,outsourcing systems and contract workers will be more in demand by businesses. Because, both provide high flexibility to the company in relation to the workforce. Adi explained that the flexibility in question is non-standard employment relationships such as part-time labor or labor with daily contracts. This flexibility is considered to be attractive for businesses to compensate for the dynamic business situation in the future. However, he warned that the welfare of these workers should be maintained by providing employment protection to them." As already conveyed in the policy implications section, we feel the need that this outsourcing-like work relations scheme is supported by an employment guarantee program that can reach the workforce more broadly," adi said. "Especially those who work in non-standard employment relationships such as part-time workers and day-to-day contract workers," he added. According to him, this needs attention, because currently the scope of labor protected by the employment guarantee program is still minimal. " In addition, it is also necessary to consider unemployment benefit schemes to protect workers who at any time lose income, for example because of job loss or those who are homeless and do not get a salary”,said Adi.
5. Conclusion
Hampered economic activity due to pandemic covid automatically makes businesses make efficiency to reduce
losses, As a result, many workers are homeless or even laid off (layoffs).
the absorption rate of labor will not be as large as the number of workers affected by layoffs. This unabated labor gap will then fall into the unemployment group.the company will only recruit workers who have high productivity and are able to do several tasks at once (multitasking).
businesses that will develop after the Covid-19 pandemic are technology-related businesses. The required workforce is also a workforce that has capabilities in the field of technology.
welfare of these workers must be maintained by providing employment protection to them.coverage of labor protected by the employment guarantee program is still minimal.
References
1. Adrian, Kevin, 2020. " Understand the term lockdown that sticking out in the middle of the coronavirus pandemic. http://www.halodokter.com./ understand-term-lockdown-the-sticking-in-the-middle-pandemic-virus-corona.
2. Central Bureau of Statistics, 2020 , https://www.akseleran.co.id/blog/dampak-corona/
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