THE PHENOMENON OF ‘MIDDLE CLASS SQUEEZE’: ANALYSIS OF CAUSES AND IMPLICATIONS FOR SOCIAL STABILITY AND SUSTAINABLE DEVELOPMENT IN INDONESIA

Abstract

The concept of “Middle Class Squeeze” refers to the economic pressures exerted on the middle class, which can result in a segment of this demographic descending into lower social classes. This study aims to investigate the factors contributing to this phenomenon and its repercussions on social stability and sustainable development in Indonesia. Employing a qualitative research methodology, this investigation utilizes a literature review complemented by secondary data analysis. The results indicate that the primary factors influencing this phenomenon encompass income stagnation, inflationary trends, escalating living costs, job insecurity, and economic policies that fail to adequately promote the growth of the middle class. The implications of the Middle Class Squeeze include an increase in social inequality, a decline in purchasing power, and a weakened contribution of the middle class to economic growth. Consequently, the formulation of comprehensive policies is imperative to sustain the viability of the middle class and to mitigate its adverse effects on national development.