Poor in the city
Malaysians are taking home a higher average income but experts say urban poverty is still a prevalent problem that shouldn’t be ignored. It is very real.
WHAT could drive a father to kill his children?
On Wednesday, the nation woke up to news of the “house of horror” in Segambut, Kuala Lumpur, where the bodies of two children and their father were found, and where the surviving two children told stories of a violent father and a mother with a loose grasp on reality ( tinyurl.com/thestar-murder).
The case is still under investigation but, naturally, people are speculating about the reasons behind this tragedy. One element that keeps coming up is that both adults were jobless.
How do you survive in a city when you don’t have a job and have four children? Even with the children’s paternal grandfather supporting the family, it must have been a very difficult situation to find yourself in.
Being poor in a city can be harder to deal with than being poor in a rural area.
“In rural areas, the cost of living is cheaper and there is no shortage of housing. Food supplies can be supplemented by farming, growing your own vegetables and rearing chickens.
“But you can’t do that in flats in urban areas,” points out Tan Sri Ramon Navaratnam, chairman of the Centre for Public Policy Studies.
He observes that there has been a major shift of the population, whereby about 70% of Malaysians are now living in urban areas compared with 20 years ago.
However, this does not mean those living in urbanised areas are better off.
Ramon notes that urban poverty is becoming a more serious problem than rural poverty, and there aren’t enough policies to resolve it.
Yet, according to the State of Households II (SOH II) report released by the Khazanah Research Institute recently, Malaysians are reportedly taking home higher monthly salaries today. As the graphic (right) shows, average household incomes have jumped from RM5,000 monthly in 2012 to RM6,141 in 2014.
The report also found that the poverty rate in the country has declined from 1.7% of households in 2012 to 0.6% in 2014.
These findings may be encouraging but some experts point out that the situation out there is not as straightforward, and that many external factors must be taken into consideration.
The higher average household income does not necessarily match the escalating costs of living today, causing urban poverty to remain a worrying problem.
The shrinking ringgit and growing inflation have hit the pockets of Malaysians, and while the cost of living is constantly going up, our standard of living has been adversely affected.
Ramon says the definition of what it means to be impoverished today should also be reviewed and compared with current needs.
“A proper living wage should be worked out on how to lead a happy and healthy life in today’s economic climate,” he says.
Pointing out that food prices have soared, Ramon says having a simple meal of roti canai or fried kway teow costs a lot more today and could impact those struggling to get by.
He proposes that the upcoming national budget focus more on helping the urban poor, as left unchecked, urban poverty could lead to social upheaval and disturbances.
“The budget should be more peopleoriented whereby the poor shouldn’t be taxed.
“It should not be planned blindly for growth but should improve on income distribution and disparities,” he adds.
According to the SOH II report, while household income gaps are narrowing, there is an inequality in how much wealth Malaysians already have.
The report also found that escalating food prices have a big impact, especially since 94.6% of all households spend more on food than on any other item.
The average food price inflation of 3.6% was even higher than the overall inflation rate of 2.4% between 2011 and 2015.
In selected urban areas, the cost of feeding a family of five with a diet that meets the Health Ministry’s nutritional recommendations is high compared to the poverty line, which is RM930 in peninsular Malaysia (see graphic for details).
Concurring with Ramon, Sunway University business school professor of economics Dr Yeah Kim Leng says urban poverty will continue to be a dominant issue in our economic and social landscape if left unchecked.
“We are faced with the rising cost of living, lack of affordable housing and low EPF retirement savings. All these factors are interrelated and do not augur well if measures are not taken to address them,” he says.
With Malaysian wages being relatively low compared with more developed countries, Dr Yeah says unskilled and semiskilled workers will be the most vulnerable to the problems of inflation and the high cost of living.
“We have a large number of low to middle income groups. While we need to ensure the cost of living is manageable, we need to know how we can find ways to accelerate the income of the urban poor.
“It has to be a twoprong approach. Controlling the cost of living will not take the nation to a high income level if people have limited education, skills and access to opportunities,” he says.
Dr Yeah acknowledges that reducing the number of hardcore poor has been successful but he says that it is now up to the Government to identify the remaining pockets of such groups and divert assistance to them.
“Hardcore poverty is not a major concern now, but the bulk of (people in the lower income group) are not able to have a satisfactory life in urban areas where the cost of living is high in relation to the income they earn,” he says.
Highlighting that society’s expectations have risen, Dr Yeah says the “goal posts” set by people have also changed with the times.
“Their expectations will be higher, especially when people migrate from rural to urban areas. You are considered poor in urban areas if you only have a motorcycle and everybody around you is driving a BMW,” Dr Yeah illustrates.
He says while salaries have been rising, it should be at a faster pace to lift the lower income groups out of their predicament.
Independent financial adviser Yap Ming Hui suggests that the country’s economic policy should ensure that nobody is left too far behind.
“In the case of urban poverty, people are faced with increased costs like transport, toll fees and room rentals. It makes life difficult. If nothing is done about it, it is only a matter of time before social problems crop up and affect even those who are not in the low income groups,” he says.
Yap says it could become a vicious cycle if the urban poor do not have access to higher levels of education and are unable to lift themselves out of poverty.
“The Government needs to do something apart from providing shortterm solutions like giving out BR1M (Bantuan Rakyat 1Malaysia) assistance.
“Those who have lost their jobs or are earning low salaries should be given opportunities to take up reskilling programmes to make them more employable and earn higher incomes,” he says.
Financial coach and Aged Care Group chief executive officer Carol Yip says while household incomes have increased according to the SOH II report, it isn’t enough to keep up with the rising cost of living.
“The EPF has often reported that many people do not have enough savings for their retirement. It is an indication that this period of increased household incomes is only the calm before the storm,” she says.
She notes that while government aid like BR1M has helped people in the lower income group cope, it can only take them so far.
“The middleincome group are equally affected when they have to take care of both their children and ageing parents.
“The cycle repeats when they have no money of their own left and have to depend on their adult children, who may have their own families by then and may be unable to care for them. Thus, urban poverty continues,” Yip says.
It was reported on Aug 15 that Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi had announced several measures to help the urban poor ease their burden.
He said all children living in the Projek Perumahan Rakyat, or People’s Housing Project (PPR), flats in Kuala Lumpur would be given free bus rides to school, while the Government will also make it easier for lowincome earners in this city to own PPR flats.
Dr Ahmad Zahid said the measures are part of the Government’s bid to place more emphasis on helping the urban poor, similar to its focus on assisting the country’s rural poor.
A proper living wage should be worked out on how to lead a happy and healthy life in today’s economic climate. Ramon Navaratnam