Jobless Growth: When the Economy Grows, But You Don’t!

Economic growth is accelerating, but jobs aren't. Explore how AI, automation and capital-intensive expansion are driving jobless growth across the globe.

Take a look around. Not at the guy next door still in his pajamas at 3 PM, but at the macroeconomic indicators.

• GDP is clocking in at healthy percentages.

• Corporate earnings are hitting record highs.

• AI is now fluent in Excel, HTML, and your replacement.

This is growth on autopilot, soaring through the clouds with no seatbelt sign and no one in the cockpit actually working.

We’ve arrived at what economists are proudly calling “jobless growth,” a term that manages to sound both impressive and mildly threatening. The economy is growing. Jobs? Less so. Especially the ones that come with benefits, and career ladders

All the charts are jumping, CEOs are celebrating, and yet the dancefloor feels... eerily empty.

• Fewer workers, more output.

• Fewer jobs, more “efficiencies.”

It’s all very neat. Very clinical. Very bloodless.

The problem, of course, is that people still exist. They still need jobs, or at least some form of livelihood that doesn’t involve monetizing their personality online. Growth may no longer require them. But their rent, oddly enough, still does.

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“Growth, But Make It Jobless”

In early 2025, Goldman Sachs economists released a cheerful little note pointing out that GDP was rising nicely, but hiring… wasn’t. Rather than triggering panic or soul-searching, they gave it a neat label: jobless growth. Because if you give a problem a neutral-sounding name, it stops being a problem and becomes a trend.

How did this economic sleight-of-hand happen? A few ingredients.

1. AI-fueled productivity. Thanks to large language models and software automation, companies now produce more without hiring more. Customer support teams shrank. Junior analysts disappeared. Entire reporting processes became something a bot handles.

2. Second, the mood shifted. Executives, still shellshocked from the wage demands of 2022 and the hiring spree of 2021, entered what experts call a “strategic hiring pause.” In normal English, that’s not hiring unless someone dies.

The results are remarkable. The economy is chugging along. Corporate profits look great. Stock markets are flying. And the Bureau of Labor Statistics, continues quietly correcting overestimated job growth in the background. What looked like 200,000 new jobs in a month turns out, weeks later, to have been closer to 20,000. Just a casual 90% markdown. Not suspicious at all.

Outside of healthcare, job creation has largely stalled. But that’s okay, because the economy doesn’t need people anymore. It has robots, and API integrations. Growth, it turns out, no longer requires labor.

The magic trick is working. There’s growth. There’s profit. There’s even “efficiency.” Just don’t look behind the curtain. You might see all the people it left behind.

AI and Automation: The Invisible Hand that No Longer Shakes Yours

Artificial intelligence and automation are perfect employees. They don’t strike, they don’t ask for raises, and they don’t have a LinkedIn profile to update when they’re inevitably laid off for version 2.0.

AI, in its purest form, is every boardroom’s fantasy. With each passing quarter, it quietly replaces human labor in places where we used to need people. Admin assistants, junior analysts, help desk agents, and content writers are all now outsourced to software that doesn’t sleep, or complain. Productivity is up. Overhead is down. All very efficient. And sterile.

In theory, this is supposed to trickle down. Lower operating costs should mean more accessible goods and services, higher margins, and room to invest in growth. But in practice, the trickle seems to have stopped just short of the average worker’s wallet. The bulk of the AI dividend is landing in shareholder returns and executive pay packets, not in widespread job creation or rising wages. ChatGPT may be great at handling customer queries, but it has yet to pay a mortgage.

Meanwhile, displaced workers are left scrambling for the so-called “new jobs” AI is supposed to create. Many are enrolling in online bootcamps, teaching themselves Python at midnight while holding down two side gigs. The promise that technology always creates more than it destroys is wearing thin when the timeline is vague.

So yes, AI is driving growth. But it’s also driving right past the labor market.

Indonesia: Island of Growth, Archipelago of Informality

In Indonesia, the GDP is cruising at 5 percent, and the jobs are... mostly hanging out in the informal sector selling fried bananas or renting out scooters. Growth is definitely happening. It’s just not happening in the places where labor laws or payroll taxes apply.

Indonesia has become something of a case study in growth without absorption. The country is seeing a surge in nickel exports and downstream industrial activity. New smelters, resource parks, and infrastructure projects are being built. And yet, the number of formal jobs being created wouldn’t fill a single Jakartan traffic jam. These mega-projects are capital-intensive and highly automated. They deliver output, not payrolls.

For everyone not working in a resource park or civil service job, the fallback plan is informality. Over 59 percent of Indonesians now work in the informal sector and that number has barely budged, despite years of economic expansion. These jobs are real, yes, but unstable and underprotected. They exist in a grey zone where labor regulations are more of a suggestion than a guarantee. A street vendor might out-earn a junior office worker, but neither has health insurance or retirement savings.

Even sectors that once absorbed labor, like textiles, retail, or tech startups, are shedding roles thanks to automation, consolidation, or investor pressure to “optimize.” So while the country keeps registering solid growth, many citizens experience it as a vague statistic that doesn’t change much in their day-to-day life.

Indonesia isn’t suffering from a lack of jobs. It’s suffering from a surplus of the wrong kind. Economic growth is real. Employment is real. But the connection between the two is becoming more fictional by the year.

Who’s Growth Actually For? Not You

Sp. who is all this growth actually for? Because if the economy is expanding, but the benefits are being air-dropped exclusively into executive bonuses and equity portfolios, then what we have is less “growth” and more of a statistical hallucination.

Once upon a time, there was a social contract. Economic expansion meant more jobs, better wages, and a sense that if the country did well, so did you. This was the GDP fairytale your parents were raised on. It made sense.

1. Growth increased demand

2. Demand created jobs

3. Jobs created income

4. Income was spent

…and round and round we went in a beautiful, vaguely Keynesian dance.

But now, growth is synonymous with “efficiency.” Efficiency means doing more with fewer people. And fewer people mean layoffs. Conveniently, those layoffs feed profit margins. Wall Street claps. HR hands out severance packages. Everyone’s happy, except for the ones without jobs.

In countries with rapidly growing labor forces, like Indonesia, the Philippines, and India, this is dangerous. When millions of young people enter the workforce each year and find only gig work, informal roles, or nothing at all, the macro story starts to crack. Growth becomes a press release. Youth unemployment becomes a powder keg.

Meanwhile, AI-driven platforms continue scaling. Their user bases grow. Their valuations climb. But their customers are becoming less able to afford the very services that were supposed to define the future.

It’s a feedback loop with diminishing returns. Growth built on excluding people from its rewards will eventually discover that you can’t sell much in an economy full of underemployed buyers. The question isn’t whether growth is happening. The question is who gets to be part of it.

On paper, jobless growth is a masterpiece. Economists love it. Markets reward it. It’s growth stripped of friction, emotion, or human dependency. A tidy achievement that looks excellent in a quarterly report and just slightly horrifying in real life. Because while the GDP graph trends upward, millions of people are stuck refreshing job boards.

Growth that doesn’t include people eventually starts to look like a glitch, not a success. A strong economy should be felt, not just reported. If it takes a PhD in macroeconomics to explain why five percent GDP growth feels like a recession to everyone you know, something has gone sideways.

Yes, there are fixes. Governments could reinvest in labor. Companies could broaden how they measure value. But that would require acknowledging that growth built on exclusion is less a win and more a warning sign.

Instead, we default to the familiar: revise the numbers after the fact, blame “headwinds,” and tell displaced workers to reskill in Python while their former employers replace them with predictive analytics.

Growth is still good. But it used to come with jobs. Now? Not so much.

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At StratEx - Indonesia Business Advisory we work with clients to redesign workforce strategies that still create value for people and the bottom line. Contact us to future-proof your workforce plans across Indonesia’s rapidly evolving sectors.