Semarang – A recent study from Universitas Pembangunan Nasional “Veteran” Jawa Timur reveals that rapid economic growth in the Kedungsepur region of Central Java has not succeeded in reducing income inequality. The research, conducted by Anggita Mulia Pangesti and Syamsul Huda in 2025, found that open unemployment, rising per capita income, and increasing minimum wages are all associated with widening income disparities across the region.
The study was published in the 2026 edition of the International Journal of Scientific Multidisciplinary Research (IJSMR). It focuses on the Kedungsepur development region, which includes Semarang City, Salatiga City, Semarang Regency, Kendal Regency, Demak Regency, and Grobogan Regency, the main economic growth corridor of Central Java Province.
According to the study, Kedungsepur consistently recorded the highest Gini ratio among all development regions in Central Java during the 2020–2024 period. The Gini ratio ranged from 0.36 to 0.38, indicating a persistent and widening gap between high-income and low-income groups.
Anggita Mulia Pangesti from Universitas Pembangunan Nasional “Veteran” Jawa Timur explained that strong economic activity in urban centers does not automatically create equal prosperity. Economic growth tends to concentrate in formal sectors and among groups with better access to education, capital, and employment opportunities.
The researchers analyzed panel data from six districts and cities in Kedungsepur between 2015 and 2024. Using panel regression analysis, they examined the relationship between open unemployment rates, per capita income, district and city minimum wages, and income inequality.
The findings show that all three variables positively and significantly affect income inequality. Higher unemployment rates contribute to widening economic disparities because more people lose access to stable income sources. When labor markets fail to absorb workers evenly, the gap between income groups becomes larger.
This condition was especially visible in Semarang City, the main economic hub of Kedungsepur. During the COVID-19 pandemic, the city experienced a sharp rise in unemployment due to layoffs and economic slowdown. The effects continued to influence income distribution even after economic recovery began.
In contrast, Grobogan Regency, which maintained lower unemployment levels, recorded relatively stable and lower inequality. The region’s agricultural sector continues to absorb a large share of workers, helping distribute income more evenly across communities.
The study also found that rising per capita income does not necessarily improve economic equality. Semarang City and Salatiga City recorded the highest per capita incomes in Kedungsepur but also experienced the highest inequality levels.
The researchers argue that economic gains are concentrated in industrial and service sectors dominated by highly educated and skilled workers. Meanwhile, informal workers and low-income communities face limited access to emerging economic opportunities.
Syamsul Huda noted that this pattern aligns with the Kuznets economic theory, which suggests inequality often rises during the early stages of economic development before declining once opportunities become more evenly distributed. However, in rapidly urbanizing regions like Kedungsepur, the benefits of growth remain concentrated among certain groups.
The research further reveals that increases in district and city minimum wages also contribute to wider income inequality. In formal sectors such as manufacturing and services, highly skilled workers benefit more from wage increases than low-income or informal workers.
In areas such as Semarang and Kendal, minimum wage policies have not fully improved welfare for all workers. Informal workers and agricultural laborers often remain outside formal wage protection systems, causing income gaps to widen further.
The researchers recommend that local governments strengthen inclusive development policies. Expanding job opportunities, improving workforce training aligned with industrial needs, encouraging equal regional investment, and strengthening informal and agricultural sectors are considered essential steps to reduce inequality.
Infrastructure development and education improvement are also seen as crucial to ensuring communities outside major economic centers can access better employment and income opportunities.
The study serves as a reminder that high economic growth does not automatically guarantee equal welfare distribution. Without inclusive access to jobs and economic opportunities, growth may instead deepen social and economic disparities in urban and surrounding regions.
Anggita Mulia Pangesti and Syamsul Huda emphasized that regional development policies should focus not only on increasing growth figures but also on ensuring that economic benefits are shared fairly across all levels of society.
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