KUALA LUMPUR: The number of Malaysian workers who earn less than RM2,000 a month dropped to 47% as at March of this year, compared with 57% in 2009, said Minister in the Prime Minister’s Department Datuk Seri Wahid Omar (pic).

In his closing address at the Khazanah Megatrend Forum 2014, Wahid said that in the same period, the number of workers earning salaries between RM2,000 and RM4,000 rose to 32% from 28%, citing data compiled by Khazanah Nasional Bhd.

Those earning in the range of RM4,000 and RM10,000 make up 16% of Malaysian workers — up from 14% five years ago — while the ones earning RM10,000 and above saw an increase to 4% from 2%.

“In tandem with the high-income economy target, the Economic Transformation Programme also aims to move workers up into higher income brackets,” said Wahid, who described the plan as seeing “encouraging” results based on the data up to March this year.

Wahid pointed out that Malaysia’s Gini Coefficient — a measurement of income distribution in which the lower the ratio the more equal income is — dropped to 0.431 in 2012 from 0.461 in 2002.

“The government will need to work harder to reduce income disparity. Not by reducing the income of the ‘haves’ but by increasing the income of the ‘have-nots’,” he said.

However, Wahid said based on the share of employees’ wages of gross domestic product  of 33.6% in 2013, it is still below the 40% level in high-income, developed economies, which he described to be the optimal target for Malaysia.

In 2008, employees’ wages made up 29.3% of the economy.

In terms of labour productivity, however, Wahid pointed out that Malaysia is still far from the regional high-income nations, which range between US$65,500 (RM214,503) and slightly below US$100,000. Last year, Malaysia’s productivity level was at US$37,264.

The country’s labour productivity growth of 3% last year, too, seemed to be lower than developing regional peers, said Wahid. This compared with China’s 7.1% and Indonesia’s 3.6%.

“It could be argued that this is because Malaysia’s productivity level is already at a higher base,” he said. He added that “Productivity growth is the only way of growing an economy without requiring additional physical inputs.”


This article first appeared in The Edge Financial Daily, on October 1, 2014.