Mandiri Institute: Strengthening Quality Employment is Key to Boosting Middle-Class Resilience

Indonesia’s economic resilience amid global dynamics continues to be well-maintained, supported by the solidity of household consumption, which contributes 54 per cent to gross domestic product (GDP). This economic activity has consistently served as an effective “protective cushion” in mitigating external shocks. However, to maintain this primary driver, strengthening the quality of employment for groups in the transition zone is deemed urgent. The aim is to encourage higher and more sustainable economic mobility. Such efforts are necessary to create accelerating growth that is inclusive across all societal layers. Analysis results from Bank Mandiri’s Economic Team through Mandiri Institute indicate that Indonesia’s economic demographic structure is undergoing a significant shift. It is recorded that 86 million people, or one in three Indonesian residents, fall into the Transitional Middle Class group. This group, encompassing Upper Aspiring Middle Class (AMC) and Lower Middle Class (MC), has highly dynamic yet vulnerable mobility characteristics. Bank Mandiri’s Chief Economist, Andry Asmoro, stated that the dynamics in this transition group pose a challenge to strengthening the national economic structure. Data from the 2019 to 2025 period shows that the Lower MC group experienced a decline of more than 11 million people, while the Upper AMC group tends to stagnate below the middle-class threshold. On the other hand, the upper middle group (Middle MC and Upper MC) recorded an increase of 416,000 people. “The next challenge is to ensure that people in the transition zone have sufficient momentum to continue rising to more stable economic levels sustainably,” said Asmo, the familiar nickname for Andry Asmoro, in an official statement quoted on Thursday (9/4/2026). In the Mandiri Institute study, job quality becomes the main differentiator between the transitional middle class and higher groups. Although more than 50 per cent of the transition group has been absorbed into the formal sector, this figure still lags far behind by a 28 percentage point gap compared to the more established middle-class group. This disparity limits people’s ability to accumulate assets and widens vulnerability in the event of economic shocks. The low quality of income is reflected in the expenditure structure of the Upper AMC and Lower MC groups, which is still dominated by primary needs. The largest allocations are for mobility (20 per cent), housing (13 per cent), and routine bills (10 per cent). Meanwhile, the portion for well-being improvements such as health and education reaches 15 per cent. This condition leaves very limited room for secondary consumption such as lifestyle, electronics, and durable goods, at only around 18 per cent. This financial limitation impacts the minimal ownership of buffer assets. Only 21 per cent of Upper AMC households have liquid assets like gold, far compared to the Upper MC group which reaches 69 per cent. Without adequate buffer assets, the transition group is highly vulnerable to inflation risks or income loss. Asmo emphasised the importance of focusing strategic steps on strengthening job quality through sustainable advantages in productive sectors. Such efforts need to be driven by improvements in investment competitiveness and ease of doing business, supported by fiscal stimuli to encourage real sector expansion and create quality job opportunities or good jobs. Mandiri Institute’s estimation results show that there are more than 2 million people from the transition group who are actually ready to rise to the middle class. Supported by relatively stable job quality, resilient purchasing power, and good buffer asset ownership, they have higher resilience and potential. “However, the expansion of employment must be balanced with efforts to increase worker productivity, which is the main key to raising real and sustainable income,” Asmo concluded. As a strategic partner to the government, Bank Mandiri is committed to supporting the strengthening of middle-class competitiveness through integrated synergies between providing inclusive financing access and financial literacy programmes. This initiative is expected to help transition community groups in managing finances and encouraging more productive asset accumulation for a stronger economic future.