More Malaysian M40 households move to B40; likewise T20 to M40 in 2020

NO thanks to a decline in paid employment and self-employment stemming from efforts to contain the COVID-19 pandemic, the mean of monthly gross income among Malaysian households contracted 10.3% in 2020 to RM7,089 from RM7,901 in 2019.

The decline was contributed by households or individuals who experienced loss or reduction of income, due to job loss, reduction of working hours or an increase in skill-related underemployment, according to chief statistician Datuk Seri Dr Mohd Uzir Mahidin.

Meanwhile, the median of monthly household gross income also registered a decline of negative 11.3% in 2020 to RM5,209 (2019: RM5,873).

“All states recorded a decline in mean and median of monthly household gross income,” commented Mohd Uzir on the Malaysian Household Income Estimates and Incidence of Poverty Report 2020 which contains the findings of COVID-19 impact study on household income in Malaysia.

By recording the lowest reduction in monthly household income, Putrajaya has the highest mean and median of monthly household gross income as compared to other states with RM12,322 and RM9,743 respectively.

Meanwhile, Kelantan recorded the lowest mean and median income with RM4,411 and RM3,010 respectively.

More hardcore poor families

The said study also revealed that there was an additional of 12.5% of households with income less than RM2,500 in 2020. Meanwhile, 20% per cent of households from the M40 (Middle 40%) group with income between RM4,850 and RM10,959 have moved to the B40 (Bottom 40%) group.

“Households in the T20 (Top 20%) group were also affected by the COVID-19 pandemic where 12.8% of this group has shifted to the M40 group,” Mohd Uzir pointed out.

“As the percentage decrease in income for B40 and M40 households was larger than T20 households group, the income distribution for B40 and M40 declined to 15.9% (2019: 16%) and 36.9% (2019: 37.2%) respectively.”

Meanwhile, the T20 group owned 47.2% of income, an increase of 0.4 percentage points from 2019.

As a whole, the household income study shows that the number of poor households increased 57.8% to 639,800 in 2020 from 405,400 households in 2019.

Datuk Seri Dr Mohd Uzir Mahidin

The incidence of absolute poverty also increased from 5.6% (2019) to 8.4%. Meanwhile, the incidence of hardcore poverty is estimated to increase from 0.4% (2019) to 1% which involved 78,000 households (2019: 27,200 households).

The incidence of absolute poverty by state shows that Sabah recorded the highest percentage of 25.3% (2019: 19.5%). Kelantan recorded a significant increase in poverty by 8.8 percentage points to 21.2% from 12.4% (2019), followed by Terengganu by 5.9 percentage points to 12% from 6.1% (2019).

“From this analysis, it is found that the role of the federal and state government as well as other relevant parties are pertinent in cushioning the impact of the pandemic as well as towards reviving the household income and the country’s economy,” added the study.

By : Cheah Chor Sooi – FOCUS MALAYSIA

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