Wealth is determined by taking the total of assets owned and then removing all debts. Basically, wealth is the total sum of resources and posessions. Certain people, organizations and nations are said to be wealthy when they are able to accumulate many valuable resources,goods or posessions. Malaysians are ranked into three different income groups: Top 20% (T20), Middle 40% (M40), and Bottom 40% (B40). Over the years, the bar for each group’s income level has increased and this is one of the indicators of economic growth. Here’s the latest definition for T20, M40 and B40 based on the findings from the Department of Statistics Malaysia in October 2017. To be in the T20 group, a household needs to earn at least RM13,148 while M40 and B40 groups have moved their bars up to RM6,275 and RM3,000 respectively. To recap, the Department of Statistics Malaysia has released a report named Household Income And Basic Amenities Survey 2016.
In the report, it stated that the median household income for T20, M40 and B40 has shown a compound annual growth rate (CAGR) of more than 6%. On top of that, Malaysia’s household median monthly income crossed the RM5,000 mark for the first time last year, with M40 households registering the highest growth in median income, according to the Department. New Median Income of T20, M40, And B40 Median Monthly Income By Household Group Household Group Median Income 2016 (RM) Median Income 2014 (RM) CAGR (%) T20 13,148 11,610 6.2 M40 6,275 5,465 6.9 B40 3,000 2,629 6.6 Though the income levels for each group has improved over the past three years, we should not ignore the escalating costs of living resulting from inflation and slower wage growth. To be exact, if we include inflation into the picture (3.15%, 2.1%, 2.09%, and 4.1% respectively in 2014, 2015, 2016, and first half of 2017), the ringgit’s value is going down It was found that the average monthly salary of employees, based on the 2016 Salaries and Wages Survey Report by the Department of Statistics, increased 6.5% to RM2,463.
In 2015, it rose 5.4% to RM2,312. Despite so, this optimistic income growth seems to be only applicable to those who are working in the Kuala Lumpur or at least nearby whereas other states are still struggling to stay on track to achieve similar income levels. For better understanding , here’s the median income level for each state Median income for a household in different states in Malaysia State Median Income 2016 (RM) Median Income 2014 (RM) W.P. Kuala Lumpur 9,073 7,620 W.P.Putrajaya 8,275 7,512 Selangor 7,225 6,214 W.P. Labuan 5,928 5,684 Johor 5,652 5,197 Melaka 5,588 5,029 Pulau Pinang 5,409 4,702 Terengganu 4,694 3,777 Negeri Sembilan 4,579 4,128 Perlis 4,204 3,500 Sarawak 4,163 3,778 Sabah 4,110 3,745 Perak 4,006 3,451 Pahang 3,979 3,389 Kedah 3,811 3,451 Kelantan 3,079 2,716 Interestingly, you can see that Pulau Pinang’s median income level is placed in the middle among its peers despite being the second highest performing state in the country with GDP per capita of RM47,322 after Kuala Lumpur at RM101,420.
It was reported that factories have been closing down in this particular state and employment opportunities are still relatively lower compared with Selangor and Putrajaya given the latter’s closer proximity to the city filled with better job opportunities. Jobs with the Highest Starting Salaries for Fresh Graduates in Malaysia Apart from Kuala Lumpur, Selangor, and Putrajaya, Pulau Pinang and the remaining 12 states’ median income level did not exceed the median income level for the M40 group in Malaysia. This means the rest still have a gap to close in order to improve the income gap between urban and rural areas. Nonetheless, it is satisfying to see the huge jump in both Terengganu and Perak state’s median income level from 2014, most likely thanks to a boost in the tourism sector.
To give you a clearer picture, we also found out the top 20 districts in the country with the highest median household income in 2016. However, this does not mean you can get the same for moving into any of these areas. You might if you work hard and be smart about it! Districts with The Highest Median Household Income in 2016 Top 20 Districts with The Highest Median Household Income District Median Income 2016 (RM) Sepang 8,174 Petaling Jaya 7,904 Gombak 7,903 Hulu Langat 7,851 Klang 6,724 Johor Bahru 6,518 Kulai 6,114 Terengganu 4,694 Bintulu 5,966 Timur Laut (Pulau Pinang) 5,964 Melaka Tengah 5,877 Barat Daya (Pulau Pinang) 5,844 Kota Kinabalu 5,683 Batu Pahat 5,516 Hulu Selangor 5,421 Muar 5,371 Kemaman 5,355 Kuala Langat 5,293 Penampang 5,211 Miri 5,208 Sungai Petani Tengah 5,172
RELATE WEALTH TO INCOME INEQUALITY
From the above information given,you can see that wealth is one of the many factors that influence Income inequality and this also portrays that due to the level of income of the various citizens of Malaysia it is determined that the rich keep getting richer and the poor remain poor Below is a way the government can reduce if not eradicate income inequality.
WAYS THE GOVERNMENT CAN MINIMIZE INCOME INEQUALITY IN MALAYSIA
Malaysians seem to more concerned about income inequality in the country as days go by According to a 2014 global survey,77% of Malaysians think that the gap between the rich and poor is a big problem for the country. Also the government has noticed that inequality remains high and that Tackling it will be malaysias biggest challenge in becoming a high-income nation.
How can the government narrow the gap between the rich and poor? The first and most important thing is to provide equal opportunities for everyone through proper Education. When more workers have high skill levels ,inequality in wages decline. Also, entrepreneurs form low class backgrounds have the skills and resources to succeed ,it is less likely That high earning employers will always come from the rich class When Malaysians have a higher level of education and skills, this will reduce the difference in wages and Salaries Wage difference among Malaysians can be brought down by increasing the education level and elevating skills.
