Income gap between rich and poor states increases — think tank

KUALA LUMPUR: The income gap between the richest and poorest states in Malaysia has gone up in two years, a study by a think tank revealed,

Institut Rakyat found out in its study that the median income of the richest, Kuala Lumpur, is almost three times the level of the poorest, Kelantan.

The widening gap is expected to put more pressure on Putrajaya’s goal in the 11th Malaysia Plan (11MP) of sharing the national wealth more fairly between all parts of the country.

The think tank also found that even though the median income level of nine states in Malaysia had gone up in two years, they were still below the national median income level of RM4,585 in 2014.

This is even though the national median income level had gone up by 11.7% to RM4,585 a month in 2014 from RM3,626 in 2012, said Institut Rakyat assistant research director Ginie Lim.

At the same time, five states, Kuala Lumpur, Selangor, Malacca, Johor and Penang recorded median income levels above the national median, said Lim.

The median represents the income at the middle of society between the richest and poorest, and economists use this measurement to see how fairly income is distributed between all levels of society.

Median is considered more accurate than average household incomes, which can be skewed by extreme high and low numbers among the richest and poorest in society.

Kuala Lumpur, Selangor and Johor were the top three states with the highest median income levels at RM7,620, RM6,214 and RM5,197 a month, respectively.

Kedah, Pahang and Kelantan were the three states at the bottom of the scale with median incomes of RM3,451, RM3,389 and RM2,716 respectively.

“Those in Kuala Lumpur who earn above RM7,620 a month have incomes 2.8 times half of all Kelantanese or those who earn above RM2,716 a month in Kelantan,” said Lim.

The figures used in Institut Rakyat’s calculations were taken from the Statistics Department 2014 household income survey that was published recently.

Lim said the gap between the states with the most income equality and the ones with least income inequality has also gone up.