A SOCIAL-ECONOMIC ANALYSIS OF THE IMPLEMENTATION OF THE JOB GUARANTEE PROGRAM IN INDONESIA

https://doi.org/10.37178/ca-c.23.2.001

Abstract

Social security is an essential component that is the responsibility of the state. In 2021, according to the mandate of Law no. 11 of 2020 concerning Job Creation, the government made the employment ecosystem more competitive by adding a social security component, namely Job Loss Guarantee (JKP), which will provide guarantees for workers to get severance pay if workers experience termination of employment (PHK). In principle, severance pay is the responsibility of the employer or company for the laid-off workers, which is an award from the employer for the employee's tenure and compensation. JKP's initial initiation was a middle way solution to continue providing workers' rights when layoffs occurred. Based on the derivative regulations of the JKP regulated in the Government Regulation (PP), One of the components in the JKP requires the government, thru the State Revenue and Expenditure Budget (APBN), to pay a contribution of 0.22 percent for each participant. This study aims to analyze the extent of the government's fiscal capacity to accommodate the mandate of Law No. 11 of 2020 concerning Job Creation. The data used are data on state spending thru the central government, government allocations for the social security function, and related general employment data. Based on the projection results using time series analysis, it shows that the estimated critical point for JKP will burden state spending starting in 2026 or 2027. Therefore, it is necessary to take concrete steps to anticipate the swelling of the JKP budget.