Two million families still earn below RM3,000, says minister

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KUALA LUMPUR: About one-third or two million Malaysian households still earn less than RM3,000 per month, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said in Parliament yesterday.

He said this figure is 28.7% out of seven million households in the country.

Income for these households is still depressed despite an overall increase in the earnings of the bottom 40% of households.

The increase was an average of between eight and 10 percentage points annually since 2009, based on surveys conducted by Putrajaya, Abdul Wahid said.

He was answering a question by Kuala Selangor MP Datuk Irmohizam Ibrahim (BN), who wanted to know the rate of increase in income, and whether it is in line with the New Economic Model’s target of increasing per capita income by 2020.

Irmohizam also wanted to know if the increase is able to meet the rising cost of living.

Abdul Wahid said that despite income growth being “on the right track” as well as various government initiatives to help the low-income group, Putrajaya could not be too comfortable as there are still many who earn less than RM3,000 a month.

Studies carried out over the past five years, however, showed a steady increase in overall household income in the country, Abdul Wahid said.

These studies were based on United Nations standards and were done twice over the past five years, he said.

“The last time we did [this] was in 2012. Now, the National Statistics Department is doing a study on household income and household expenditure. Based on the initial data on average income, we saw an increase of income from RM4,025 in 2009 to RM5,000 in 2012, while this year the average household income was RM5,919.”

Specifically on the middle-income group, Abdul Wahid said average income was RM2,830 in 2009, before rising to RM3,626 in 2012, and RM4,258 in 2014. This was an increase of eight points annually over the past five years.

At the same time, the consumer price index increased 2.3% from 98.3 to 110.

Abdul Wahid said this meant that growth in household income was more than the inflation rate in the last five years. The studies have also shown a 10-point increase in the earnings of the bottom 40% of households, Abdul Wahid said.

Earnings of this group was an average of RM1,440 in 2009, then RM1,847 in 2012, and RM2,312 this year.

Abdul Wahid attributed the “steady increase” in household income to government initiatives that focused on the bottom 40% group. These initiatives were the introduction of the minimum wage, the 1Malaysia People’s Aid (BR1M) fund, and other programmes aimed at increasing access to jobs and business opportunities.

He said Putrajaya will intensify efforts to create more jobs and business opportunities to increase the incomes of this group.  — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on October 8, 2014.