Malaysian households need more welfare provision


THE Bantuan Sara Hidup (BSH) aid is not sufficient for the millions of households who actually need the yearly amount on a monthly basis, according to Research for Social Advancement (REFSA).

In a recent report analysing household income and living wages across Malaysia, REFSA revealed that 2.2 million or 31% of households are more than RM1,000 short of reaching a living wage on a monthly basis.

Lead researcher Darshan Joshi stated that despite obvious — and vast — differences in the cost of living across the country, Malaysia’s flagship welfare policy, BSH, is geographically uniformed.

“This means that low-income families living in inexpensive areas receive the same amount of aid as those living in more expensive areas.

“BSH provides, at most, RM1,000 per year to households with a monthly income of RM2,000. This does nothing for the millions of households (mostly urban poor) who need at least this amount on a monthly basis,” he said in a statement yesterday.

The report shows that a geographically-uniform approach to welfare provision ignores differences in the cost of living across states and the rural-urban divide, undeserving the urban poor and providing aid in excess of what is necessary in rural areas and in states where the cost of living is significantly lower.

Joshi said almost two-thirds of the 2.2 million households live in urban areas, indicating the presence of a large population of underserved urban poor.

“Despite decades of median wage increases and reductions in both the Gini coefficient and official measures of poverty, a significant proportion of Malaysian households still struggle to make ends meet,” he added.

According to REFSA, there has long been a discrepancy between what official statistics suggest about the state of household income and reality.

“The former paints a picture of swift upward mobility: Median wages quadrupled between 1995 and 2016, and in that time, our Gini coefficient, a measure of inequality, has decreased by almost 10%. Poverty, too, has been largely eliminated,” Joshi said.

He highlighted that it is clear across the country, households are struggling, and this was the case even before the coronavirus crisis shuttered the Malaysian economy.

“The losses of income and jobs will worsen the plight of low-income Malaysians even further. It is imperative that policymakers take steps to address this issue.

“Some form of targeted basic income will be needed to address this issue in the short run. In the longer term, labour market reforms are urgently required,” he added. He emphasised a larger proportion of struggling Malaysians need the government to step in and play a bigger role to ensure a decent living.

REFSA found living wages vary greatly across the country, from as low as RM3,964 in rural Perak, to RM7,156 in urban areas of Sabah.

On average, 43% of urban households and 59% of rural households earn less than their respective living wage. This amounts to roughly 2.4 million households with incomes insufficient for them to enjoy a “decent” standard of living.

In absolute terms, Joshi said, twice as many urban households as rural ones suffer from the monthly RM1,000 income shortage, proving the idea that Malaysia’s urban poor are vastly underserved.

“More than 610,000 households are short of their living wage by at least RM3,000 per month, and in Sabah, over 80,000 households are short by more than RM5,000 per month,” he added.

The study also concluded that wages in the country are too low at present.


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