More than 70% of formal-sector workers in Malaysia earn RM5,000 or less, raising concerns over living costs, savings and financial resilience.
PETALING JAYA: More than 70 per cent of Malaysians employed in the formal sector earn RM5,000 or less per month, raising concerns over the growing disconnect between wages and the cost of maintaining a decent standard of living, economists say.
Chief economist at Bank Muamalat Malaysia Berhad, Dr Mohd Afzanizam Abdul Rashid said 70.2 per cent of formal-sector workers were earning within this income range as of December 2025, leaving many households increasingly exposed to rising living costs.
He stated that inflationary pressures and higher household expenses continue to weaken purchasing power, particularly for families with dependants living in major urban centres.
Referring to Malaysia’s Monthly Expenditure on a Decent Living framework, Afzanizam said a married couple aged between 18 and 29 with two young children in Kuala Lumpur requires around RM6,183 a month to meet essential living expenses.
He added that households earning below RM10,000 monthly in urban areas may struggle not only to cover basic needs but also to meet financial commitments and build emergency or long-term savings.
In comparison, he said a family of the same size living in Kuala Terengganu would require approximately RM3,845 a month, highlighting the significant differences in living costs between locations.
“The contrast shows that geographical factors, particularly the divide between urban and rural areas, have a major influence on purchasing power and disposable income,” he reportedly said.
The findings point to substantial variations in living expenses across Malaysia, with urban households facing greater financial demands despite generally higher income levels.
Afzanizam stressed that financial resilience depends not only on earnings but also on prudent money management and responsible borrowing habits.
He cited data from the Malaysian Department of Insolvency, which shows that personal loans remain the leading contributor to bankruptcy cases, followed by business financing, vehicle hire-purchase loans, housing loans and credit card debt.
“This demonstrates how poor debt management can significantly affect the financial stability of individuals and families,” he said.
