Indonesia’s demographic bonus, which should be a great opportunity for economic growth, is now facing serious challenges. These include a rising number of layoffs across various industrial sectors and an increasing unemployment rate.
This issue became a significant discussion point presented by a lecturer from the Department of Social Development and Welfare, Faculty of Social and Political Sciences, Universitas Gadjah Mada (Fisipol UGM), and also a researcher at the UGM Center for People’s Economy Studies, Dr. Hempri Suyatna.
He delivered these insights on Monday (May 26) at a Sekolah Wartawan event at UGM.
Dr. Suyatna revealed that the issue of layoffs has become a ‘super-productive threat’ affecting various sectors.
Not only labor-intensive industries like garments and textiles, which were previously dominant, but also technology and media industries are now impacted by the wave of layoffs.
“Thousands of employees have been laid off, such as at Panasonic, Microsoft, Shopee, and Tokopedia. Even major media outlets have adjusted content, optimized labor, and changed business models,” Dr. Suyatna said.
From a number of surveys presented by Dr. Suyatna, including one from the Indonesian Traders Association Survey, several key factors cause layoffs.
These include a decrease in public purchasing power, company budget efficiencies, rising production costs, automation and technology adoption, and reliance on export markets.
“This condition certainly has a significant impact on the socioeconomic structure of society. One of the most highlighted is the potential decline of the middle class,” Dr. Suyatna noted.
He added, “When the middle class declines, purchasing power weakens, and the poverty rate is at risk of rising.”
In this regard, Dr. Suyatna provided several recommended steps to address layoffs.
First, there needs to be a revision of Government Regulation No. 8 of 2024, where regulations are needed to limit the massive and uncontrolled entry of foreign products.
Then, fostering a conducive business development ecosystem is crucial, along with creating policies to support layoff victims.
This includes providing innovation downstreaming, social assistance, and stimuli for the middle class.
These stimuli cover access to capital, technology, marketing, and market-driven vocational training.
According to Dr. Suyatna, flexibility in recruitment is also very important, especially in uncertain economic situations, such as the increasing number of layoffs in various sectors.
Therefore, Dr. Suyatna also agrees with and supports the plan of the Minister of Manpower, Yassierli, to abolish age limits as a requirement for job vacancies.
“This flexibility is important because many people are losing their jobs. The government must encourage job creation while providing wider access to decent work for people of various age groups,” Dr. Suyatna stated.
However, Dr. Suyatna also emphasized that changes in employment regulations must remain based on human rights principles, especially in the context of child protection.
“We must not open up job access only to sacrifice children’s right to grow and develop. Childhood is a time for character building and innovation, not for work. So even if the rules are abolished, age limits must still be considered,” Dr. Suyatna concluded.
Author: Lintang Andwyna
Editor: Gusti Grehenson
Post-editor: Afifudin Baliya
Photographer: Donnie Trisfian