Income inequality in Malaysia widened even while median household income rose to RM5,873 in 2019, according to latest statistics

The median monthly income for Malaysian households continued to grow in 2019, albeit at a lower pace of 3.9 per cent, as compared to a growth rate of 6.6 per cent per annum in 2016. — Picture by Hari Anggara
The median monthly income for Malaysian households continued to grow in 2019, albeit at a lower pace of 3.9 per cent, as compared to a growth rate of 6.6 per cent per annum in 2016. — Picture by Hari Anggara

KUALA LUMPUR, July 10 ― As the median household income continues to grow in Malaysia, the latest official statistics showed that income inequality in the country has gone up in 2019 when compared to 2016.

In the Household Income and Basic Amenities Survey Report 2019 released today, the Department of Statistics Malaysia’s (DOSM) figures showed income inequality calculated based on two categories ― gross income (which is before tax and contributions to social security scheme are paid) and disposable income (which is after deducting tax, zakat and social security scheme contributions).

The income inequality in Malaysia was measured using the Gini coefficient, with a higher value showing higher inequality in income.

When it comes to gross income, the income inequality in Malaysia went up, with the Gini coefficient value increasing from 0.399 in 2016 to 0.407 in 2019. (This is the first time since 2004 that the household income gap has been recorded as widening in Malaysia, based on the periodically available figures that previously showed income inequality to be on a generally declining trend.)

The income inequality based on gross income increased for both the urban (0.389 to 0.398) and rural (0.364 to 0.367) areas, while income inequality also increased for all three major ethnic groupings ― Bumiputera (0.385 to 0.389), Chinese (0.411 to 0.417), Indians (0.382 to 0.411).

As for income inequality based on disposable income, it increased from 0.391 in 2016 to 0.393 in 2019, again increasing when it comes to urban areas (0.380 to 0.385) but decreasing when it comes to rural areas (0.365 to 0.361).

For income inequality based on disposable income, the Bumiputera group recorded a decrease from 0.380 to 0.377, while both the Chinese (0.396 to 0.399) and Indians (0.372 to 0.399) recorded increased income inequality.

 

 

Household income

The median monthly income for Malaysian households continued to grow in 2019, albeit at a lower pace of 3.9 per cent, as compared to a growth rate of 6.6 per cent per annum in 2016.

In terms of amount, the median monthly household income in Malaysia grew from RM5,228 in 2016 to RM5,873 in 2019. This means that half of the households in Malaysia had a monthly income of RM5,873 or less in 2019.

 

The median monthly household income differs from state to state, with seven locations exceeding the national median household income of RM5,873 in 2019, namely Kuala Lumpur (RM10,549), Putrajaya (RM9,983), Selangor (RM8,210), Labuan (RM6,726), Johor (RM6,427), Penang (RM6,169) and Melaka (RM6,054).

The others fall below the national median of RM5,873 in 2019, namely Terengganu (RM5,545), Kedah (RM5,522), Negri Sembilan (RM5,055), Perlis (RM4,594), Sarawak (RM4,544), Pahang (RM4,440), Perak (RM4,273), Sabah (RM4,235), and Kelantan (RM3,563).

Even for districts, the median household income also differs, with three Selangor districts having the highest median household income nationwide in 2019 namely Petaling (RM8,993), Sepang (RM8,937) and Gombak (RM8,501) while the three administrative districts with the lowest median household income nationwide are all in Sabah (Pitas at RM1,999, Tongod at RM2,197 and Kota Marudu at RM2,425).

When it comes to households in urban and rural areas, the median monthly household income increased in 2019 when compared to 2016.

The median monthly household income in urban areas grew at a rate of 3.8 per cent from RM5,860 (2016) to RM6,561 (2019), while growing in rural areas at a rate of 3.3 per cent from RM3,471 (2016) to RM3,828 (2019).

 

When it comes to households based on income groups, the median monthly household income increased for the B40 group from RM3,000 (2016) to RM3,166 (2019), while also increasing for the M40 group from RM6,275 to RM7,093, and for the T20 group from RM13,148 to RM15,301.

 

 

To find out which income group your household belongs to in Malaysia, look at the monthly income for your household.

In 2019, a B40 household is one that earns less than RM4,850 per month with 2.91 million such households, while the middle income group or M40 households are those that earn between RM4,850 to RM10,959, while the T20 households earn more than RM10,960 per month.

This is an increase from 2016 when the income level for B40 was below RM4,360, for M40 (RM4,360 to RM9,619), and T20 (more than RM9,620).

In line with the growth in population, the number of households in each category has also increased: both B40 and M40 at 2.78 million each in 2016 to 2.91 million in 2019, and for T20 (1.39 million households in 2016 to 1.46 million in 2019).

What about the average monthly household income?

As for the average or mean monthly household income for Malaysia, it increased from RM6,958 in 2016 to RM7,901 in 2019.

The states which recorded mean monthly household incomes that exceeded the national level of RM7,901 are Kuala Lumpur (RM13,257), Putrajaya (RM12,840), Selangor (RM10,827), Labuan (RM8,319) and Johor (RM8,013), while the rest were below the national level: Penang (RM7,774), Melaka (RM7,741), Terengganu (RM6,815), Negri Sembilan (RM6,707), Sarawak (RM5,959), Sabah (RM5,745), Pahang (RM5,667), Perak (RM5,645), Kedah (RM5,522), Perlis (RM5,476) and Kelantan (RM4,874).

When it comes to districts, the top three with the highest average household income nationwide are all in Selangor (Sepang at RM12,254, Petaling at RM12,145, Gombak at RM11,536), while the three districts with the lowest levels are two in Sarawak (Pusa at RM2,758, Pakan at RM3,175) and one in Kelantan (Lojing at RM3,002).

 

How much did Malaysian households spend?

After making compulsory payments such as taxes, zakat, social security scheme contributions, Malaysian households’ median disposable income each month was RM5,116 in 2019 (an increase from RM4,513 in 2016), while the mean disposable income each month was RM6,764 in 2019 (an increase from RM5,928 in 2016).

As for how much they spent every month, Malaysian households’ median monthly household spending increased from RM3,314 in 2016 to RM3,654 in 2019, while their average or mean monthly household spending increased from RM4,033 in 2016 to RM4,534 in 2019.

 

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