‘4.4 million workers earn RM2,160 or less a month’
KUALA LUMPUR: The living wage for a single adult household in Kuala Lumpur was estimated at RM2,700 in 2016, according to Bank Negara Malaysia.
For a couple without children, the estimated living wage was RM4,500, and RM6,500 for a couple with two children, the central bank noted in its 2018 Annual Report.
Bank Negara said the living wage was meant to be sufficient to pay for minimum acceptable needs and not for aspirational lifestyles, and not necessarily uniform throughout the country.
Its estimates included assumptions about the dwellings, dining habits, transport usage, recreational activities, education, healthcare and childcare expenditure, as well as contributions to the Employees Provident Fund, income tax and savings.
“Over the medium term, the cost of living in Malaysia will continue to be a factor in impacting households’ wellbeing and sentiments, especially since wages remain low,” Bank Negara said.
It noted that about half of Malaysian workers, or 4.4 million people, earn RM2,160 or less a month.
Households in the Bottom 40 per cent of income distribution experienced slower income growth over the 2014 to 2016 period relative to the higher-income households.
The income increase was almost completely offset by the increase in expenditure, leaving little room to accumulate savings.
Bank Negara said policies designed to address the issues would need to reflect and address households’ salient concerns in concrete terms.
“Near-term measures can be put in place to help contain any sharp increases in cost of living, especially for low-income households.
“These include measures to improve market structure and distribution to improve efficiencies and competition, and thus lower prices, and measures to improve public transport connectivity.”
However, more importantly, longer-term structural policies that will boost productivity and income growth are key in supporting households’ ultimate pursuit of a higher standard of living, Bank Negara added.