The Collapse of Our Middle Class

The title of this article is inspired by ‘Robohnya Surau Kami’ (The Collapse of Our Surau), a 1955 short story by the late writer A.A. Navis. The story bitterly depicts the collapse of an institution due to the neglect and indifference of the surrounding community. After seven decades, the metaphor is once again contextually relevant for reading a phenomenon that is testing us: slowly but surely, Indonesia’s middle class is collapsing. If the surau in the short story symbolised neglected spirituality, then the middle class today is the symbol of the nation’s economic resilience that is gasping for air. When this group weakens, what is threatened is not merely statistical figures on a desk, but also the future of millions of families whose dreams of prosperity are drifting further away. We can honestly look around us. On social media and in coffee shop conversations, similar anxieties are voiced by office workers, educators, health workers, and micro-entrepreneurs. They are a group that does not qualify as poor enough to receive social assistance, yet is not wealthy enough to escape the economic storm. Every month, they must perform financial acrobatics. The prices of rice, cooking oil, and kitchen spices creep upwards. On the other hand, children’s education fees, health insurance contributions, and transport costs following the increase in non-subsidised fuel continue to drain savings balances. Their income moves at a tortoise’s pace, while the prices of basic necessities shoot up like a meteor. The phenomenon of ‘mantab’ (makan tabungan, or eating into savings) is becoming increasingly familiar as a way to survive until the end of the month. Yet, the middle class is the main pillar supporting the national economy. Data from the Central Statistics Agency (BPS) for 2024 shows that the middle class and aspiring middle class groups comprise 66.35 per cent of the total population and contribute 81.49 per cent of national consumption. The wheels of business run on the purchasing power of this group. Economist Simon Kuznets (1955) explained that a country with a strong middle class has a more solid foundation for development, as they act as a social balancer and are the most compliant taxpayers. Anatomy of ‘downward mobility’ However, BPS data (2024) sends an emergency signal. The number of Indonesia’s middle class has steadily declined from 57.33 million people in 2019 to 47.85 million in 2024. This means that in the last five years, around 9.48 million people have been thrown out of the comfort zone of the middle class and fallen into the vulnerable group. This is not merely a string of lifeless numbers. Behind it are millions of stories of parents forced to move their children to cheaper schools and the bitter decision to cut daily nutritional intake. According to World Bank indicators, the majority of our middle class are aspiring middle class who are vulnerable. The smallest economic shock, be it a serious illness, layoffs, or a spike in food prices, can directly throw them into the abyss of poverty. This real condition is reflected in the downtrading phenomenon confirmed by Bank Mandiri Economist Andry Asmoro (2024). To cope with increasingly thin wallets, consumers are flocking to much cheaper products, postponing purchases of durable goods, and even eliminating travel budgets. Economist Mohammad Faisal (2024) stressed that the weakening purchasing power of this group is a yellow light for the national economy, given that household consumption is the largest contributor to our GDP.