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Salary Increases Stagnate, Citizens' Purchasing Power Remains Constrained

Citizen spending has decreased amid stagnant wages. Consequently, the purchasing power of the populace is increasingly under pressure. This situation serves as a warning for the national economy, which relies heavily on consumer spending. 

The Data Journalism Team of Kompas Daily has discovered that over the past 15 years, from 2010 to 2024, the average wage growth for citizens has shown a tendency to slow down. This analysis is based on the average net wages of workers recorded by the Central Statistics Agency (BPS). In 2010, the average wage growth was 6.7 percent per year. However, by 2024, this growth has dwindled to just 2.8 percent annually, following a two-year period where it was 12.2 percent in 2022 and 3.5 percent in 2023. Throughout these 15 years, there have been eight instances of deceleration, occurring in 2012, 2014, 2017, 2018, 2019, 2020, 2023, and 2024. 

In tandem with the decline in wage growth, the growth of citizen spending has also slowed during the same timeframe. From 2010 to 2014, average spending grew by 12.6 percent per year. This growth rate decreased to 8.5 percent per year from 2015 to 2019, and further declined to 5.2 percent per year from 2020 to 2024.  

Citizens are resorting to frugality to cope with rising living costs amidst limited wages. Edwin (31), a teacher at a private elementary school in West Jakarta, has limited his daily expenses to a maximum of Rp 25,000. 

Edwin must economize as his monthly salary is only Rp 3.4 million, significantly below the Jakarta provincial minimum wage of Rp 5.39 million for 2025. He also does not foresee any prospects for a salary increase in the near future. "I have been working there for almost five years, but I have never received a raise," Edwin stated on Sunday, February 16, 2025.  

A similar trend of adapting to a frugal lifestyle is reflected in a National Leadership Survey conducted by Kompas from January 4 to 10, 2025, where 32 percent of respondents reported practicing thriftiness. Among those who chose to economize, 25 percent belong to the lower and lower-middle classes. 

Tag: National Economy National Leadership Survey Salary Increases Stagnate