Inflation hits Malaysian workers hard last year

Malaysia to see 3.2% real wage growth in 2018
ECONOMY
Tuesday, 19 Dec 2017
12:07 PM MYT
KUALA LUMPUR: The average salary in Malaysia is expected to grow by 3.2% in 2018, an increase over the 1.3% growth recorded in 2017, said global management consulting firm, Korn Ferry Hay Group (Korn Ferry). In a statement today, Korn Ferry projected that financial services, construction and property development and management industries, are expected to record the highest salary increases, while sectors such as health and life sciences, oil and gas and industrial products would register the lowest growth … for more, go to https://www.thestar.com.my/business/business-news/2017/12/19/malaysia-to-see-3pt2pct-real-wage-growth-in-2018/

Inflation hits Malaysian workers hard last year

Last year’s average inflation rate was about 4%. The estimated average wage growth was only 1.3%!

It doesn’t take much nor the brain of a rocket scientist for anyone to figure out the woes of Malaysian workers.

“The global economy is expected to continue to be sluggish for another year or two. Young Malaysian workers must brace themselves for the worse,” Gerakan Deputy Speaker Syed Abdul Razak Alsagoff said.

He said according to the Employees Provident Fund (EPF) statistics, only those aged 35 and above benefited from up to 4% wage growth.

“This means the best reward Malaysian workers could achieve from employers is to counter the 4% inflation rate,” he added.

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Malaysia's median wage growth to reach 6.5pct: MIDF Research
By Bernama - June 2, 2017 @ 7:25pm
KUALA LUMPUR: The Malaysian median wage growth is expected to reach 6.5 per cent this year on the back of an improved and stable labour market, MIDF Research said. It said the projected growth was in line with the country's track record which saw median wage grew above 5 per cent for two consecutive years, namely 6.7 per cent in 2015 and 6.4 per cent in 2016 … for more, go to https://www.nst.com.my/business/2017/06/245100/malaysias-median-wage-growth-reach-65pct-midf-research

Syed Razak, who is Gerakan’s nominee to contest N.37 Bukit Lanjan in the coming 14th General Election (GE14), said employers had probably rewarded those aged 35 and above for their experience and competency in their work.

“Young workers must, therefore, plan a prudent life. For those starting new families, it will indeed be a very challenging struggle. Persevere until the good times return,” he added.

The following was posted by online news portal The Malaysian Insight (TMI):

"2017 wage growth benefited workers above 35, says EPF
Sheridan Mahavera
Updated one hour ago · Published on 18 Jan 2018 7:07PM

Employees Provident Fund senior official Nurhisham Hussein speaking at the Malaysian Income Distribution in a Global Context forum today. He says wage growth is quite poor among the middle 40% of Malaysians, depending on their age. – The Malaysian Insight pic by Nazir Sufari, January 18, 2018.

WAGES for workers above 35 grew by 4% last year, said an Employees Provident Fund (EPF) senior official, even as many complained that salary growth stagnated in 2017.

However, the fund’s economies and capital markets general manager, Nurhisham Hussein, said this trend was not repeated among employees younger than 35.

“We are still trying to find out what is driving this, as the data is very recent,” he told the audience at the Malaysian Income Distribution in a Global Context forum, organised by the Khazanah Research Institute (KRI), today.

“What we are seeing is, wages are increasing, but not across the board.”

EPF, which takes contributions from private sector workers, is seeing salary increases for the bottom 40% (B40) of Malaysians and the top 20% (T20) of wage earners.

“But, wage growth is quite poor among the M40 (middle 40%), depending on their age,” said Nurhisham.

The slow rise in wages compared with the inflation rate, which averaged about 4% last year, was a common complaint among Malaysians in 2017.

Business consultant Kerry Hay Group estimated that average wages grew by only 1.3% last year.

Economist Azrul Azwar Tajudin predicted that the trend of wage growth not keeping up with the rise in the prices of goods would continue this year.”


Khazanah Research Institute head of research Dr Allen Ng speaking at the Malaysian Income Distribution in a Global Context forum today. He says one of the main reasons for the decreasing inequality in wages is the steady rise in incomes for the bottom 40% and middle 40% groups. – The Malaysian Insight pic by Nazir Sufari, January 18, 2018.

Nurhisham said the rise in wages did not automatically translate into more social mobility for workers.

Although the average Malaysian had a good chance of doing better than their parents, he said, it was still highly possible for them to stay in the same socio-economic class throughout their lives.

“Mobility within a generation is poor. For instance, if you are a B40 worker, there is a 50% chance that you will continue to remain in that class. 

“If you are a T20 earner, there is a 60% chance that you will stay within that income group. So, where you start off matters.”

Wage growth is the common theme at the forum, which aims to analyse Malaysia’s efforts in reducing income inequality, a key policy of the government.

Studies by KRI have shown that inequality, as measured by the Gini coefficient, has decreased from 1970 to 2016.

KRI head of research Dr Allen Ng said on a scale of 1 (more unequal) to 0 (less unequal), the coefficient had been reduced from 0.5 in 1970 to 0.399 in 2016.

He said in 1970, T20 households earned nine times the income of B40 households, and in 2016, the difference was reduced to 5.6.

He said one of the main reasons for the decreasing inequality was the steady rise in incomes for the B40 and M40 groups. – January 18, 2018."

N.37 LET BUKIT LANJAN SOAR WITH SYED ABDUL RAZAK ALSAGOFF