Experts say Malaysia should adopt a living wage to tackle high living costs and promote inclusive economic growth, moving beyond the minimum wage.
SHAH ALAM: Malaysia should adopt a living wage to tackle rising living costs and promote more inclusive economic growth, according to experts.
A living wage is calculated based on the real cost of living in a specific area to ensure workers maintain a decent standard of living.
Universiti Teknologi MARA (UiTM) coordinator Dr Mohamad Idham Md Razak said this approach ensures workers earn a decent living, eases financial stress and boosts productivity.
“The national minimum wage approach is increasingly seen as inadequate in addressing the differing living costs across locations, particularly between major cities and rural areas,” he said.
He noted that high costs can indicate robust economic activity, but problems arise when cost increases are not matched by corresponding wage growth.
UniKL Business School economist Associate Prof Dr Aimi Zulhazmi Abdul Rashid said high living costs in Selangor, Putrajaya and Penang reflect development imbalances and the gap between income and expenses.
He said classifying households as B40, M40 or T20 is increasingly flawed as it ignores wide variations in basic costs across locations.
“These differences may also explain the high migration from rural areas to major cities in search of higher incomes,” he said.
Aimi Zulhazmi added that many migrants get trapped by higher living costs and have to juggle multiple jobs.
The Department of Statistics Malaysia (DOSM) recently reported that Kuala Lumpur, Selangor, Penang and Putrajaya had the highest living costs.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the 2024 Basic Expenditure for a Decent Living Index analysis revealed clear differences among states.
For single-person households, Selangor recorded the highest index at 92, followed by Penang at 84.2 and Putrajaya at 83.1, with Kuala Lumpur set at 100.
