RM3,500 wage target no guarantee of decent living, says economy minister

PUTRAJAYA: A monthly wage of RM3,500 might not ensure a decent standard of living for all families, as a single national figure cannot capture diverse household requirements across regions, according to Economy Minister Akmal Nasrullah Mohd Nasir. The target to attain a median monthly salary of RM3,500 by 2030 is a crucial sign of labor market advancement and increasing incomes.

However, reaching this figure does not imply that every individual or family earning RM3,500 enjoys the same purchasing power or quality of life. Various factors like location, number of dependents, housing, transportation, and financial obligations influence the real value of an income. The Economy Ministry is now concentrating on the Basic Expenses for Decent Living (PAKW) measure, which accounts for the actual costs required for a household to live comfortably, based on location and family circumstances.

This approach provides a more comprehensive picture compared to income-based assessments. Median income represents the middle value in an income distribution, with half of the workforce earning below it, and the other half earning more. Median wages are more useful than averages when there are significant income disparities between regular workers and high-income earners.

Nonetheless, since median wages offer a macro perspective, they do not consider varying living expenses faced by individual households. Therefore, achieving the RM3,500 median wage target does not automatically guarantee that every family in Malaysia enjoys a decent standard of living. Income must be compared to expenses. If wages increase but housing, food, education, and transportation costs rise faster, real household purchasing power may stay the same.

The minister also pointed out that relying solely on income categories like B40, M40, and T20 might overlook families who truly need aid, while individuals with lower commitments could receive assistance just because generic income definitions treat them the same. Applying PAKW in policy implementation is complex, as living costs and obligations differ by location, family size, and household composition.

While income-based thresholds are simpler to administer, this convenience does not ensure the most accurate distribution of aid. The government needs to adopt a more targeted approach using detailed data without making the application process too challenging for the public. Thus, median wage targets, the employee compensation share, and PAKW should be used together to determine if citizens' income genuinely provides a decent living.