iddle- and high-skill jobs in Indonesia have steadily disappeared in recent years as the country struggles to create better-paying employment amid weak hiring demand, according to a recent World Bank report. The trend has fueled rising educated unemployment while putting downward pressure on wages for middle- and upper-income workers.
Analysts warn that the shift signals Indonesia risks being trapped in lower-value segments of global supply chains that rely heavily on low-skilled labor, while higher-skilled, higher-paying jobs are increasingly captured by competing countries.
In its latest report titled “Indonesia Economic Prospects” published in June, the World Bank highlighted that the country’s decreasing medium- and high-skilled employment has further eroded the supply of jobs capable of supporting middle-class livelihoods.
Between 2018 and 2025, wages in medium- and high-skilled employment fell by about 1 and 2 percent per year. In contrast, low-skilled occupations gained about 1.7 percent a year.
“The divergence has steadily eroded the share of middle-class workers, falling from 14.5 percent in 2018 to 7.1 percent in 2025. The share of middle-class population, using official definition, has followed the same trajectory, declining since 2018,” reads the report.
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Furthermore, the limited formal employment opportunities have increasingly pushed higher-skilled and educated individuals into informal employment.