Single adults can’t survive on RM1,200 a month, says don

An economist says Klang Valley single adults would need a side income if the minimum wage is RM1,200 a month.

KUALA LUMPUR: A single adult living in the Klang Valley can’t make ends meet on RM1,200 per month and will need a side income, according to an economist.

Yeah Kim Leng of Sunway University’s Business School told Bernama that a minimum wage of RM1,200 a month proposed by the government was below the estimated living wage in the Klang Valley.

Prof Yeah Kim Leng of Sunway University Business School

Single adults would need a supplementary income to make ends meet, either from a second job or from a side business.

A living wage is defined as the minimum income necessary for a worker to meet his basic needs including food, housing and other essential needs, while a minimum wage is an amount set by the authorities with the aim of protecting workers against unduly low pay.

The finance minister, Lim Guan Eng, had recommended in his 2020 Budget speech that the minimum wage be increased next year to RM1,200 a month in major cities.

However,  Yeah quoted from a Bank Negara study in 2018, that showed the living wage to be RM2,700 a month for a single adult in Kuala Lumpur, RM4,500 for a couple without children and RM6,500 for a couple with two children.

He noted that the monthly income of RM5,344 for B40 households (bottom 40% of income earners) in Kuala Lumpur in 2016, as reported by the Statistics Department, would make it challenging for such families to afford a home, car and other consumer durables.

“They can perhaps get by with basic necessities and other less costly essentials such as mobile phones and computers,” he said.

Yeah said it was difficult to determine the the absolute and relative poverty rates in Kuala Lumpur without a further breakdown of the B40 income profile – “existing data merely indicates that out of the 2.8 million B40 households across the country, there are 55,600 such households in Kuala Lumpur”, he said.

Ahmed Razman Abdul Latiff, an economic analyst with Putra Business School at Universiti Putra Malaysia, said the high cost of living was also felt by Selangor residents although they enjoy an average income that is higher compared to people in other states.

He said house payments were higher, and goods and services were also more expensive.

Selangor is one of six states whose combined contributions to the country’s gross domestic product in 2018 totalled 72.1%, according to official statistics.

The average household income in the state stands at about RM4,307 for B40 households, RM8,790 for M40 households (or middle 40% of income earners) and RM21,125 for T20 households (or top 20% of income earners). - FMT