Essay on Indonesia 's Unequal Income Distribution

Essay on Indonesia 's Unequal Income Distribution

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Indonesia is part of Southeast Asia, and also one of the economy pioneer in this part of Asia. As a country with the fourth largest population in the world, around 255 million people, and live in an approximately 735 thousands square feet of land and sea, Indonesia has plenty of natural resources, and human power to boost their economy. In addition, with those sources and power, Indonesia should be able to have a great economy. Unfortunately, Indonesia also suffer a common economic problem, which is an unequal income distribution. This condition is described by the increasing amount of Gini index in Indonesia in the last decade. Therefore, it is important to know the cause of unequal income distribution, and also the government reaction in order to solve this issue, since Indonesia has a promising sources.

The unequal income distribution in Indonesia is reflected from the rising of Gini index from 0.36 to 0.41 in the last decade, and this indicate that there is an unequal income distribution. Looking at this income problem, the first thing that comes as the cause of this problem is uneven resources distribution. Indonesia has plenty of both natural and human resources, and it is proven by Indonesia as a former member of OPEC, Organization of the Petroleum Exporting Countries, and also as a supplier of migrant worker. The uneven resources distribution in Indonesia makes each region to have a different income distribution because the region that has more resource will employ more people, and also get more investor to invest in their territory. This is relate with the demand and supply theory because when there is more supply than the demand, there wage of the worker cannot be higher. Hence, it makes some region to have higher m...

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... this phenomena, since the price of some commodities in Indonesia rise, as a result of the over export in the commodity. Then, the poor labor welfare that makes the low-income people to suffer more because the government is not strict enough, so that there are workers that earn less money than the minimum wage, and cause them unable to improve their life and income to shrink the gap. Moving to the government reaction, they raise the minimum wage in order to make the low-income people to have an improvement in their life. Furthermore, the government also allocate lots of money in helping poor people, by giving them health care and smart card in a purpose of creating healthier and smarter new generation. Moreover, a better new generation means that a higher quality of human resource will be create and supply, which responsible of the Indonesia 's economy in the future.

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