BY SHERIDAN MAHAVERA
Published: 14 September 2014
Putrajaya says Malaysia's average monthly household income has gone up but has purchasing power also increased? – The Malaysian Insider file pic, September 14, 2014.It may sound fantastic that Malaysia’s average monthly household income has gone up 18% to RM5,900 in 2014 from two years ago but economists say averages do not really tell whether Malaysians are better off than before.
A closer look at this figure, which was announced by Putrajaya on September 8, and how it is calculated, reveals that it can be misleading, economists told The Malaysian Insider.
The statistics does not reflect whether Malaysians are earning more in their jobs, they said. It also does not show how much goods and services their money can buy.
Not all income is earned
Household income means all income brought in by all members of a household, said economist Azrul Azwar Ahmad Tajuddin.
“It is a measure of combined incomes in all forms – salaries, wages, gains from investments, cash transfers such as BR1M, retirement income such as pensions.”
Economics minister Datuk Seri Abdul Wahid Omar, who announced the RM5,900 figure, had admitted to this, saying it includes returns on investments such as unit trust.
Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar admits that the average household income data which he announced may not be an accurate reflection of overall household income in Malaysia. – The Malaysian Insider file pic, September 14, 2014.He also admitted the figure was not an accurate reflection of overall household income in Malaysia and could be skewed by those earning high incomes.
According to the Statistics Department’s website, household income surveys are done once every four years. Average household income is the total income of all households in Malaysia divided by the number of households.
The total number of households as of 2014 stands at 7 million, said Wahid, who is Minister in the Prime Minister’s Department.
One household on average comprised 4.3 members as of 2010, according to data from the Malaysian Employers Federation.
An economist with the blog Economics Malaysia argues that there is also an element of business income that gets calculated into the mix.
This business income is derived from everything, from nasi lemak stalls to million dollar, multi-partner legal and accountancy firms, said the economist who only wants to be known as Hisham.
In a blog posting on September 11, he argued that about two-thirds of Malaysia’s total labour force earns a salary.
“Everybody else is either running a registered business (about half a million people or so), or in the informal sector which is not well tracked.”
Then there’s something called imputed rent. Hisham claimed this is a value that is added to the calculation of household income the world over, including Malaysia.
The concept is that if an income earner lives in his own home, he is earning “imputed rent”.
Since everyone in society needs shelter and has to pay for “housing services”, a house owner is deemed to own such a service. Therefore he earns income which is called "imputed rent" even if no money actually flows to him.
But it still gets calculated into the government’s household income figures, said Hisham, and can make up about 10% to 15% of average gross income.
Higher incomes but not
higher wages
This bring us to the critical question: if average household income includes all these elements, how much of it is made up of our wages?
And if average household income is going up, does it mean our wages are going up as well?
The MEF’s statistics, which it gets from the Human Resources Ministry, shows that wages are going up by an average of 6% per year from 2009 to 2013.
MEF secretary Datuk Shamsudin Bardan said for 2014, wages are estimated to grow by an average of 33% for those earning below RM900 a month. This is due to the minimum wage policy that came into effect in January last year.
Of the 6.5 million workers in the formal private sector, he said, 75% are in the non-executive category who earn up to RM5,000 a month.
In 2012 and 2013, wages for non-executives went up 5.83% and 6.78% respectively.
The rest are classified as management and earn up to RM30,000 a month. In 2012 and 2013, their wages went up 6.29% and 6.31% respectively.
“So, if you look at average income growth, it is slower than average household income,” said Azrul Azwar, who works for the Selangor Menteri Besar’s office.
According to government data, average household income went up 18% from 2012 (RM5,000) to 2014 (RM5,900).
Azrul’s argument is this. Let’s say from 2012 to 2013 (two years), the average growth for household income is 9% per year.
“This means household income growth a year, 9%, is higher than that of wage growth 6%. So, there is a considerable amount of non-wage income that is influencing total household income.”
This could include BR1M cash handouts, he said. In 2012 and 2013, households earning below RM3,000 received one-off BR1M handouts of RM500.
Household income could also include the high profits from stocks and shares that the top richest households in Malaysia make and which get calculated into the national household average, said Azrul.
Hisham of Economics Malaysia gives his own rough estimate of what average salaries are: “Take away 10% to 15% of gross income for imputed rent, take away another 20% to 25% for capital and mixed income, then divide by 1.8 (approximate average number of income earners per household).
“For an average household income level of RM5,900, that works out to an average salary per worker of between RM2,350 and RM2,100.”
“I don’t think that’s too far from where most people think Malaysian wages actually are.”
According to the Statistics Department’s wage survey, average monthly wages of about 9 million workers surveyed in Malaysia in 2012 and 2013 were RM1,916 and RM2,052 respectively.
But is it enough?
Perhaps the most crucial aspect in this debate about household income is the purchasing power of income, said Universiti Malaya senior lecturer Dr Lee Hwok Aun.
“It is ultimately more important than the income level. We constantly hear stories of individuals and families struggling to make ends meet, amid this glowing report of rising household income.”
According to the Statistics Department, inflation as measured by the consumer price index (CPI) is 3.3% as of June.
It is possible that the services and goods Malaysians need to buy and pay for now are changing in ways that are not captured in the CPI, said Lee.
“As the largest components, food accounts for 30% of the budget, housing and utilities 23%, and transport 15%. While education (1.4%) and health (1.3%) are notable small items,” said Lee of UM’s Faculty of Economics and Administration.
“For some families, education and health are not minor expenses and the cost of education and health may be increasing more speedily.
“This combination of factors may be fuelling the constant feedback that cost of living is rising, and a seemingly widespread disbelief at the relatively low inflation rate.”
As shown in the differences between average wage growth and household income growth, it does not reflect the hardship of what the majority of people really feel, said Azrul.
Since household income is the average of all households, rich and poor, it is possible that the wealth of the top most earners is helping to lift the average so that even the lowest earners look like they’re well off, he said. – September 14, 2014.
没有评论:
发表评论