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#37344 - 29 Nov 06 03:33 JP/The rich, the poor and the new middle class
biznews Moderator Offline
Pujangga Besar

Registered: 24 Apr 08
Posts: 7508
Loc: Jakarta
From The Jakarta Post

The rich, the poor and the new middle class

Debnath Guharoy,

Do we really understand what life is like for Indonesians in general, who has how much money and what has become of the middle class since the economic crisis of 1997?

This report dwells on how much Indonesians are earning and how that defines the boundaries of each socio-economic strata.

The information is based on Roy Morgan Single Source, a survey conducted in the top 20 cities, 20 towns and rural surrounds with 25,000 respondents annually, covering more than 90 percent of Indonesia's population over the age of 14.

Most Indonesians are not earning very much, not surprisingly.

Without including students, housewives, the aged and the disabled, the overwhelming majority of workers earn less than Rp 500,000 per month. Imagine what that buys at the market today for a home that has just one breadwinner in a culture where most women are mothers and homemakers.

It's nothing to be ashamed of, that's the painful reality.

What is shameful, though, is the extent to which we exploit that reality without doing our individual bit for the collective good. There's nothing wrong with owning a Mercedes Benz if the chauffeur too can send his children to school for a proper education.

Across the nation's cities, towns and villages, only 1 percent of the population aged over 14 has an individual income of more than Rp 2.5 million per month.

While 45 percent live in homes comprising just parents and their children, 15 percent live as members of extended families where multiple incomes can alleviate the pain of meager individual incomes.

Individual Income Strata (IIS) of Workers

IIS Monthly Income Total Urban Rural

A1 Rp 3,000,000+ 0.5% 0.9% 0.3%
A2 Rp 2,500,000 - 2,999,999 0.5% 0.8% 0.2%
B1 Rp 2,000,000 - 2,499,999 1.5% 2.4% 0.7%
B2 Rp 1,500,000 - 1,999,999 4.2% 6.3% 2.3%
C1 Rp 1,250,000 - 1,499,999 4.4% 5.9% 2.9%
C2 Rp 1,000,000 - 1,249,999 7.1% 9.2% 5.2%
D1 Rp 800,000 - 999,999 13.3% 14.4% 12.3%
D2 Rp 600,000 - 799,999 18.8% 20.7% 17.1%
E1 Rp 500,000 - 599,999 13.4% 11.5% 15.1%
E2 Less than Rp 499,999 36.2% 27.8% 43.8%

Base: Indonesian 14+ who are employed
Sample size: n=11,258
Time Period: July 2005-June 2006

The chart defines Indonesia's Individual Income Strata (IIS), for the first time. It reflects individual income in summarized groups, A to E, even though detailed bands of personal income are now available for the first time in Indonesia.

It embraces the entire population of earners only, in other words, it excludes housewives, students, the unemployed and retirees. This group of non-earners at 50 percent of the population earn nothing or less than Rp 600,000 per month.

Of all the people who earn, one out of three brings home between Rp 600,000 and Rp 1 million per month making D the single-largest group. Group C, people earning between Rp 1 and Rp 1.5 million rupiah each month, comprises 11.5 percent of all earners.

Then there's B at 5.7 percent earning between Rp 1.5 million and Rp 2.5 million a month, within which B1 at Rp 2 to 2.5 million per month accounts for just 1.5 percent of all earners.

At the top end of town is A at 1 percent, with income ranging between Rp 2.5 and Rp 5 million per month, including A2 earning on between Rp 2.5 and Rp 3 million per month. Over 387,000 people in the elite A1 group make over Rp 3 million each month.

Hard to believe? Just remember that these facts come from the most statistically robust, geographically balanced consumer database in the country, updated every 90 days. It is more right and less wrong than any other source.

The contributor is an advertising professional turned researcher and consultant based in Melbourne. He has lived and worked across the Asia Pacific region, including Indonesia. He remains a regular visitor.
_________________________ Indonesian Business and Investment News Aggregator

#37350 - 29 Nov 06 06:12 Re: JP/The rich, the poor and the new middle class [Re: KuKuKaChu]
riccardo Offline

Registered: 12 Oct 05
Posts: 2195
Loc: Jakarta
ACNielsen's methodology is different, they use household expenditure. There is way, way tooooo much guesswork involved with determining individual income like these guys have tried to do...

Indonesia's a funny place in this regard; formal, stated income means next to nothing. A TNI General's salary is like Rp3.5 million, but he has somehow "earned" enough to "acquire" 5 luxury Euro cars, a hotel and some pubs... A mid-level civil servant at the immigration office may have a stated income of just Rp2.2 million, and came from a dirt poor village with no inheritance money, but he drives home in his mercedes and his kids go to expensive national plus schools with tuition of over Rp5 million/mo.

Duh... this guy's survey and final numbers, ultimately mean very little and have no bearing whatsoever on reality. ACNielsen doesn't even bother with asking about salary, they simply ask how much people spend on housing, food, schooling, savings etc.. Their A1 category is over Rp3million/mo spending and is about 6% of the population. And yet this guy says only O.5% earn over 3 mill!
Just here proffering my pearls to swine, my throat to wolves and my trousers to the flagpole.


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