The Fake Rich Middle Class Phenomenon: Luxurious Lifestyle but Financially Fragile

The term “fake rich middle class” or “pseudo-wealthy middle class” is currently a hot topic on social media. This phenomenon describes a group of people who appear established with a glamorous lifestyle, but in reality, stand on a very fragile financial foundation.

Dr. Tanti Novianti, a lecturer at IPB University’s Business School, explains that this phenomenon is part of the dynamics of middle-class growth in developing countries, including Indonesia.

Although economic growth over the past two decades has successfully increased the number of middle-class individuals, the quality of their financial resilience remains a significant concern.

According to Tanti, the World Bank defines the middle class as a group capable of meeting basic needs while accessing non-essential consumption such as recreation, education, and technology. However, behind this purchasing power, an anomaly known as “fake rich” emerges.

This group is typically seen actively consuming goods and services that symbolise status. However, such luxury is often not accompanied by adequate asset ownership or cash reserves.

Tanti elaborates that this phenomenon is triggered by a combination of economic, social, and psychological factors. One of the most dominant is the pattern of economic growth that encourages consumption more than the formation of productive assets.

“When income increases, many households experience lifestyle inflation. On the other hand, access to consumer credit such as credit cards, vehicle instalments, and pay-later services has become increasingly easy,” she explains.

In addition, social pressures in competitive urban environments make consumption a symbol of status. This aligns with Thorstein Veblen’s theory of conspicuous consumption, where consumption is done to display prestige, not merely to meet needs.

In the digital era, social media exacerbates this condition through the demonstration effect. Standards of success displayed on digital platforms prompt individuals to imitate the lifestyles of higher-status groups to gain social recognition.

In conclusion, Tanti emphasises that strengthening the middle class requires a paradigm shift. Sustainable welfare cannot be measured solely by one’s ability to shop.

“A strong middle class is not only marked by consumption ability, but also by the ability to build assets, manage risks, and maintain long-term financial stability,” she concludes.