The Formal Sector Contributed More to the Increase in Indonesia's Middle-Class Jobs

According to a World Bank report, formal workers' wages contributed significantly more to the growth of the Indonesian middle class between 2011 and 2018. By sector, the largest contribution came from the industrial sector.

Specifically, wages of formal workers in the industrial sector contributed 34.3% to the increase in middle-class employment. Meanwhile, wages of informal workers in the industrial sector contributed only 13%.

Formal workers' wages in the service sector contributed 30% to the increase in middle-class employment. In contrast, the contribution from informal workers in this sector was only 12.6%.

From the agricultural sector, formal workers' wages contributed only 7.9% to the increase in middle-class employment. The contribution from informal workers' wages in this sector was even lower, at 2%.

The World Bank states that the creation of middle-class jobs is crucial for Indonesia to become a middle-income country. Currently, almost half of Indonesia's population still belongs to the aspiring middle class.

This means half of Indonesian society has successfully escaped poverty and vulnerability. However, they have not yet been able to enjoy the middle-class standard of living for their families.