Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
By Michelle Brohier
Malaysia has introduced a minimum wage for all employees, with the minimum monthly salary now being RM900 for those in the Peninsular and RM800 in Sabah, Sarawak and Labuan. This is definitely good news for those who have been struggling with low incomes and can barely pull through, but with the rising cost of living, there are doubts that the minimum wage really can cover the cost of living. Rather than the minimum wage, people also need to consider a person’s ‘living wage’.
A living wage is the minimum income necessary for an employee to cover their basic life needs. This usually covers housing, food and even clothing. But there are other basic necessities an employee will also need to remain working, and these basic necessities will grow especially within a family with children. Some countries have published recommended ‘living wages’ which are done by independent research companies based in the cost of living in a particular city. But for the purpose of this article, we’ve done a calculation based on the exact numbers provided by test subjects – hence the most personal living wage calculation.
Which makes us wonder: Can the current salary of an average Malaysian (not even getting into minimum wage) cover their living wage?
The Basics for an individual
Every Malaysian is unique in their own way, with their own way of living and their own different needs. So for a salary to cover everyone’s lifestyle is almost impossible. But it should be able to cover a person’s basic needs in order to survive.
A young man at 25 who works as a junior app developer earns RM2500 a month. He lives with his parents so that he doesn’t have to bear the cost of rental but he still has a number of basic needs which include:
Unifi: RM179
Motorbike Loan: RM200
Laptop Loan: RM150
Food and Drinks: RM400
Phone Bill: RM40
And for the cost of petrol and traveling as part of his job, together with shopping and dating his girlfriend, he believes it cost a little more than RM1000 altogether. After deducting 11% EPF, his salary comes up to around RM13.91 per hour and his living wage is at RM12.30 per hour. His salary barely covers his living wage, but he knows in the course of an emergency, such as when he got into an accident, the cost of medication and fixing up his bike would diminish whatever savings he has.
And this is a common picture among young Malaysians who have just graduated. Those who start off with the basic salary of RM1,800-RM2,000 will struggle with today’s expenses, especially if they need to afford other basics such as transportation and pay back their student loans.
This is an estimated basic living wage for a new graduate, especially one who needs a place to stay and a car to get to their work place:
Rent: RM650
Phone bill: RM30
Student Loan: RM100
Food: RM300
Car Loan: RM500
Petrol: RM200
Parking & Toll: RM200
The total reaches about RM1,980. If this young graduate works for about 8 hours a day during the usual weekdays, this would mean their living wage would be around RM12.38 per hour. But if he earns RM2000 per month, he is essentially earning (after EPF) RM11.13 per hour only. This does not even include the cost of buying clothes, medication or other necessities that could arise.
In order for those who’re earning around RM2000 and under, getting a car or even renting a place may not be an option for them due to the financial constraints.
The Basics for a family
BR1M this year seeks to help young singles earning less than RM2000 and a family household earning RM4000 will receive financial aid from the government, there are those who believe this is the benchmark of those who truly are poor and struggling. If a family were to have even one child, then a household earning a combined income of RM4000 can barely cover every day costs which includes:
Utility Bills: RM150
House Loan: RM900
Food: RM1000 (groceries and packed lunches for working adults and schoolgoing children. This affords an average of RM10.70 per person per day.)
Phone bills: RM105
Car Loan: RM550
Petrol: RM350
Unifi Bill: RM149
Clothes: RM300
Medical: RM200
Family insurance: RM600
All together, the living wage of a family with monthly expenses like this would be about RM26.90 when their monthly household income of RM4000 is a mere RM22.25 per hour. There’s no room for savings, no room for accidents or other unexpected expenses as their salaries are unable to cover the cost of living. If the family needs appliances or even furniture, they would surely have to get into debt. And the more they have children, the more impossible it would be to carry on with their current lifestyle and expenses.
The Malaysia’s current living wage
There is no certain way of knowing the best living wage for all Malaysians as cost of living differs from state to state as does each person’s commitments. But consider the fact that the minimum wage would mean RM5.63 per hour and most people’s true living wage can barely survive on that amount. But many are doing so, either by being in debt or losing out on basic necessities like medical care and a proper, nutritious diet. It’s not an ideal situation, but this is the reality that many Malaysians are facing today.
Have you wonder why you are constantly getting into debt? Perhaps it is because your living wage is exceeding your earned wage. Calculate your own personal living wage by taking the total number of your commitments and dividing this by the number of hours you work a month then contrast it with how much you earn a month. The result may surprise you.
This was brought you by MICHELLE BROHIER from RinggitPlus.com. RinggitPlus compares credit cards, personal loans and home loans to help Malaysians get more for their money.
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