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Indonesia's middle class struggles with financial insecurity
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Office workers walk on a pedestrian bridge over Jl. Sudirman in Jakarta on June 7, 2024. (Antara/Reno Esnir)
M
iddle-class Indonesians in Jakarta say they are struggling to achieve financial security as the daily necessities associated with urban lifestyles press hard against their monthly income, a perception borne out by new government statistics.
The Jakarta Post has found that food and a roof over one’s head eat up a major chunk of middle-class’s income in the capital, leaving little room for savings and investment and hence keeping many in a delicate position.
Kompas daily reporter Erika Kurnia has about Rp 8 million (US$520) in monthly take-home pay after deductions of taxes and social insurance premiums but has to spare about 15 percent of that on the monthly fee for her office’s cooperative.
That leaves her with less than Rp 7 million per month for other spending, of which “about Rp 5 million to Rp 6 million” go toward regular living expenditures. Speaking to the Post on Tuesday, she said saving a meaningful amount generally only happened when she raked in extra income from business trip allowances.
Coordinating Economic Minister Airlangga Hartarto announced on Aug. 27 that Indonesia’s middle class was worse off today than in 2019, because of the COVID-19 pandemic’s “scarring effect, which hopefully can be resolved”.
In an ad hoc press conference called by Statistics Indonesia (BPS) on Aug. 30, the agency’s interim head, Amalia Adininggar Widyasanti, explained the government’s economic stratification.
Using a system created by the World Bank in its 2019 publication Aspiring Indonesia: Expanding the Middle Class, the government categorizes people based on their monthly spending.
