SMES, PURCHASING POWER PARITY, LABOR WAGES,  AND ECONOMIC STRUCTURE ON POVERTY REDUCTION  IN CENTRAL JAVA

Sarjiyanto Sarjiyanto; Safara Indah; Ana Ahmad; Suryanto Suryanto; Sarwoto Sarwoto

doi:10.23969/trikonomika.v25i1.33595

Authors

Sarjiyanto Universitas Sebelas Maret, Indonesia
Safara Agnesia Indah Universitas Sebelas Maret, Indonesia
Ana Shohibul Manshur Al Ahmad Universitas Sebelas Maret, Indonesia
Suryanto Universitas Sebelas Maret, Indonesia
Sarwoto Universitas Sebelas Maret, Indonesia

DOI:

https://doi.org/10.23969/trikonomika.v25i1.33595

Keywords:

SMEs, Poverty, Purchasing Power Parity, Median Labor Wages, Economic Structure

Abstract

The detrimental effects of poverty highlight the need to understand factors influencing its reduction. This study aims to examine whether SME performance, purchasing power parity (PPP), labor wages, and economic structure impact poverty levels. The study finds that PPP and labor wages significantly contribute to poverty reduction, whereas the number of SMEs, employment rates, and economic structure have not effectively alleviated poverty in Central Java. This result may be linked to the impact of the COVID-19 pandemic, which markedly increased poverty levels during the study period. We recommend that the Central Java Government take measures to strengthen SMEs by improving access to capital and providing training, diversify the economy to create job opportunities in low-income areas, boost PPP through cash transfers, raise wages by implementing minimum wage policies and subsidies, and re-evaluate the economic structure to foster inclusive growth for sustainable poverty reduction.

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