Indonesia's Highly Educated White-Collar Workers Face Wage Decline and Shrinking Middle Class

(Taipei, Central News Agency reporter Lo Wei-chia, Jakarta, 14th) The World Bank recently released a report indicating that Indonesia's highly educated and white-collar workers are facing a dual impact of declining real wages and a shortage of formal job opportunities, leading to a decrease in the proportion of the middle class over recent years. Indonesian economic experts analyze that wage growth for this group has not reflected their professional skills, and they are unable to access various government social welfare benefits, resulting in livelihood difficulties.

On the 11th, the World Bank published its latest Indonesia Economic Prospects report under the theme 'Managing Risks, Enhancing Productivity.' The report defines Indonesia's middle class threshold as individuals with monthly expenditures between 1.2 million and 6 million Indonesian rupiah (approximately NT$2,135 to NT$10,676).

Indonesia's 'Kompas' newspaper reported today that, according to World Bank statistics, the proportion of middle-class workers in Indonesia has dropped from 14.5% in 2018 to 7% in 2025.

Regarding wage systems in the labor market, Indonesian provinces and cities set different statutory minimum wage standards based on local economic development and inflation levels. For example, in Jakarta, the economic and trade hub, the statutory minimum monthly wage for 2026 has been raised to 5,729,876 Indonesian rupiah (approximately NT$10,195).

● Shortage of High-Skilled Jobs: University Graduates Shift to Hospitality and Retail

'Kompas' reported that between 2018 and 2025, real wages for white-collar workers with tertiary education or engaged in professional technical work in Indonesia decreased annually by approximately 1% to 2%. In contrast, wages for grassroots workers grew at an average annual rate of 1.7%. The World Bank report noted that under this employment market trend, tertiary-educated graduates are shifting toward low-income informal sectors such as agriculture, accommodation, and food services.

The World Bank report stated that although Indonesia created 1.9 million jobs between August 2024 and August 2025, and the unemployment rate dropped to 4.9%, most new job openings were concentrated in the informal sector. Additionally, Indonesia's underemployment rate (incomplete employment) has been continuously rising since 2022, currently standing at 32.7%, indicating that many workers face mismatches between their education and employment, hindering upward mobility in Indonesia's labor market.

● Middle-Class Squeeze: Economists Highlight Lack of Social Support

Wisnu Setiadi Nugroho, an economist at Gadjah Mada University in Yogyakarta, Indonesia, told local media that Indonesia's middle class is currently under multiple pressures. He explained that because the middle class does not qualify as poor, they are not prioritized for government social assistance. When facing rising living costs, their limited financial resilience places them in a precarious position—excluded from policy safety nets despite not being impoverished.

Wisnu further illustrated that as the government implements fuel subsidy purchase restrictions linked to tax data, many middle-class households are gradually losing eligibility for energy subsidies. He estimated that if consumption patterns remain unchanged, increased transportation costs alone could raise household expenditures for the middle class by 15% to 20%, placing a significant burden on daily life. (Edited by Chang Chih-hsuan) 1150614