46% of Indonesia's Middle Class Now Has a Side Job

KIC defined respondents based on the middle-class category set by Statistics Indonesia (BPS), namely individuals aged 18 to 60 with average monthly household spending of Rp2 million to Rp10 million. Of the 1,000 respondents, 463 reported having a side job and formed the basis for further analysis.

Their biggest reason is clear enough. As many as 53.1% run a side job to meet daily living needs.

This figure is important to read correctly. The motivation is not lifestyle or increased consumption. Many of them are simply trying to make ends meet until the end of the month.

In addition, 41.5% of respondents said they want to add to their savings, while 27.4% explicitly want to reduce their dependence on their main job. Read together, these three reasons make the pattern clear: Indonesia's middle class is managing risk on its own. They are not waiting for the system to provide certainty; they are building their own safety cushion.

KIC calls this phenomenon an economic buffer. In that context, a side job functions as a cushion when the main income is considered not stable enough.

The KIC findings did not emerge without context. There are structural dynamics that need to be read alongside them.

Data from Mandiri Institute shows Indonesia's middle class fell from 47.9 million people in 2024 to 46.7 million in 2025. In one year, the number shrank by 2.5%. Compared with its peak in 2019 of 57.33 million people, this means more than 10 million people have dropped out of the middle class over the past six years. Over the same period, the aspiring middle class grew by 4.5 million people and now covers 50.4% of Indonesia's population.

This means many people have not fallen far down, but neither have they been able to climb back up. They sit in a vulnerable zone, one step below the middle class, waiting for a chance to rise or a risk that pulls them down.

Mandiri Institute also noted that this pressure is not evenly distributed. South Sumatra lost 693,000 people from the middle class in 2025, while Jakarta lost 119,000 people. According to Mandiri Institute, this pattern shows that pressure on the middle class is asymmetric and heavily influenced by regional economic conditions.

For those still holding onto middle-class status, the risk of dropping a level feels very real. That is why the side hustle has become a rational response. The motivation is not greed but the fear of losing a status built through hard work.

The figure of 46% actually holds two different stories. The first group is those who are surviving. Their motives are dominated by financial pressure: daily needs, insufficient savings, and debt that needs to be paid off. As many as 10.8% of KIC respondents specifically cited debt as a reason. For this group, the side hustle is a response to inadequacy and is often chosen because there is no better alternative.

On the other side, there is a group that is building. As many as 35.4% of respondents run a side job to develop their interests and talents. Then, 30% use it to build business networks, while 28.1% treat it as preparation toward entrepreneurship. For this group, the side hustle serves as a strategy to accumulate skills and relationships before taking on bigger risks.

Both groups sit within the same statistic, but the needs and the responses relevant to each are in fact very different.

Among the various reasons in the KIC survey, one figure draws attention: 14% of respondents said a side hustle helps them reduce stress.

At first glance, this finding sounds contradictory. Extra work is usually associated with an extra burden. But a particular psychological framework can help explain it.

In mental health literature, the term peniaphobia is used to describe an intense and persistent financial anxiety. This fear of poverty is not always proportional to a person's actual financial condition. The term comes from Greek, namely penia, meaning poverty, and phobos, meaning fear. Although it is not yet formally listed in the Diagnostic and Statistical Manual (DSM) or the International Classification of Diseases (ICD), psychologists acknowledge that the experience behind it is real.

According to the mental health platform Amaha, peniaphobia is often rooted not in poor financial conditions but in the belief that financial failure equals personal failure. Those who have worked hard to build stability after a difficult starting point are often more vulnerable to this feeling, precisely because they fear slipping back.

Various reports also show that psychologists see this phenomenon strengthening among young people who grew up through the 2008 global financial crisis and the Covid-19 pandemic. Both events demonstrated firsthand that stability can disappear in a short time.

In this context, a side hustle has a psychological function distinct from its economic one. When all income depends on a single source, every sign of instability in the main job can feel like a threat to one's entire life. Mass layoffs at other companies, news of downsizing, or a poor performance review can immediately trigger anxiety. Conversely, having a second source of income changes that calculation. When one source wavers, the situation does not automatically turn into a total crisis.

That is why the KIC finding makes sense. Those 14% of respondents are not simply seeking more money for more consumption. They are seeking a sense of security.

The side hustle phenomenon is not unique to Indonesia. The World Bank estimates that around 40% of the global workforce used platform-based work as a secondary source of income in 2024. In Australia, around 61% of workers run a side business alongside their full-time job. This figure rose from 54% in 2022 and was largely driven by rising food and housing costs. Meanwhile, in the United States, the figure was around 36% in 2024.

Even so, these numbers cannot be compared directly with the KIC data. The Indonesian survey covers only the middle class who already have a main job, while data from other countries generally uses different definitions and population coverage. For that reason, what is more relevant to compare is not the size of the numbers but the direction of change.

And that direction looks consistent. When the cost of living grows faster than wages, more and more people seek extra income outside their main job. Inflation outpacing real wage growth has become a recurring pattern, whether in Melbourne, Manila, or Jakarta.

Indonesia has a different context, not only because of its scale of 270 million people and ever-rising digital penetration, but also because of the rapid change in its social class structure. When more than 10 million people leave the middle class in six years, the pressure to survive is no longer just about the economy. It is also about social identity.

For brand executives, a middle class with two or more sources of income behaves differently from the conventional middle class. They tend to be more cost-sensitive, more selective in discretionary spending, and spend more time in digital ecosystems, both as consumers and as producers. Understanding this segment means understanding individuals who are at once buyer and seller, employee and small entrepreneur, user and platform partner.

For policymakers, meanwhile, the question is more fundamental. If nearly half the middle class feels it needs an income reserve just to meet basic needs, then there is a structural aspect that needs examining, not merely individual behavior.

A side hustle can indeed be a choice that expands opportunity. But when it becomes the only way to feel financially secure, that condition deserves to be treated as a signal that needs follow-up.

The KIMCI survey was conducted by KIC from Q4 2025 through Q1 2026, involving 1,000 middle-class respondents aged 18 to 60. The analysis of side jobs is based on the 463 respondents who have a side job. The definition of middle class refers to BPS, namely households with average spending of Rp2 million to Rp10 million per month.

Sources

Katadata Insight Center (KIC). Katadata Indonesia Middle Class Insight (KIMCI). April 2026. Presented at IDE Katadata Future Forum 2026, Jakarta. Available at: databoks.katadata.co.id

Statistics Indonesia (BPS). Susenas data on the size of Indonesia's middle class 2019 to 2024. Presented before the House of Representatives, August 2024. Cited in various reports including: Jakarta Globe, "Indonesia's Shrinking Middle Class Threatens Growth, Consumption," 18 August 2025. Available at: jakartaglobe.id

Gadjah Mada University (UGM), Faculty of Economics and Business. "The Shrinking Middle Class, The Slowing Engine of Social Mobility." February 2026. Referring to the Mandiri Institute report. Available at: feb.ugm.ac.id

Amaha Health. "Peniaphobia: Fear of Money That Impacts Your Daily Life." March 2026. Available at: amahahealth.com

Birds Advice. "Understanding Peniaphobia: Gen Z's Fear of Poverty." March 2026. Referring to clinical psychologists' assessments of financial anxiety among the younger generation. Available at: birdsadvice.com

World Bank. Estimate of the global gig workforce as a secondary income source, 2024. Cited in: Whop Blog, "100+ Side Hustle Statistics for 2026." Available at: whop.com