Facts

Poverty

  1. Absolute poverty has decreased but relative poverty has emerged as a growing concern in recent years.
    - Relative poverty, which measures the number of households living with less than half of the median income, is a better approach to assess inclusiveness compared to absolute poverty, which measures the number of households living below the poverty line.

Challenges faced by vulnerable groups

  1. Sabah has the most poor people compared to any other state. More than half of its population are Bumiputera minorities.
    - Bumiputera minorities in Sabah and Sarawak and the Orang Asli of Peninsular Malaysia remain the most vulnerable ethnic groups in Malaysia, lagging far behind the Malays, Indians and Chinese in benefiting from the country’s progress.

Income & wealth inequality

  1. The distribution of wealth is extremely skewed and is concentrated at the top.
    - Asset inequality is nearly double that of income.
    - The relative income gap between the rich and the poor has not changed in 20 years.
    - Strengthening the pro-poor policy and introducing active redistribution policies will positively impact income distribution to benefit all members of society.

Low wages

  1. If the priority before was to ensure full employment, the new challenge is to address wage inequality and wage stagnation.
    - Wage share to national income has decreased despite the sharp increase of corporate profits to national income.
    - The rise in wages has been staggering further and further behind the rise of productivity in the country.
    - Introducing a minimum wage has the highest positive impact on improving inequality.

Small middle class

  1. The country’s middle class remains small at 20% of total households, despite continuing economic growth.
    - This figure has not improved significantly over the last two decades, indicating limited upward social mobility.
    - Social safety nets such as access to income security, basic services and opportunities help protect vulnerable groups with limited assets and capabilities, and prevent them from falling back into the bottom 40%.

> Get the whole picture

Nicol David
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It is essential that Malaysia continues to prioritise inclusive growth and social cohesion, and moves forward with the second generation policies that are needed to support this.
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