MTUC welcomes ‘more realistic’ poverty line of RM2,208

The Malaysian Trades Union Congress says many living in urban areas are earning low salaries and saddled with high household debts.

PETALING JAYA: The Malaysian Trades Union Congress (MTUC) has welcomed the new poverty line of RM2,208, saying it bodes well for the government’s pledge to tackle poverty with more realistic data.

It also said the new poverty line, up from RM980 previously, can be further improved, considering the benchmark is for a family of four to live actively and healthily.

“This is to cater to the high cost of living in urban areas where 75% of Malaysians are employed, with many of them on low paying jobs and saddled with high household debts due to the spiralling cost of living,” its secretary-general J Solomon said.

He said Bank Negara Malaysia had estimated that up to 27% of the households in Kuala Lumpur were earning below the living wage, or the minimum acceptable standard of living.

The new poverty line, announced by the Department of Statistics yesterday, is calculated based on 2019 methodology as opposed to the 2005 methodology, which benchmarked poverty at RM980.

Chief statistician Mohd Uzir Mahidin said the revision was in accordance with current needs that emphasised optimal food intake and quality non-food basic requirements.

In a statement today, Solomon said the revised national poverty line index (PLI) put the country’s poverty rate at a more realistic 5.6%.

“We are happy that there were enough voices of reason within Putrajaya to make these important adjustments as the 0.4% poverty rate that stood previously was based on an anarchic methodology of calculation which failed to capture the gravity
of the problem,” he said.

He said the new benchmark for poverty was considerably less than the RM2,700 monthly income MTUC had been urging the government to fix as the minimum living wage, especially in urban areas.

“Nevertheless, establishing a new index for the PLI at more than double the monthly
income set previously bodes well for the government’s pledge to tackle poverty with
more realistic data.

“This is important as poverty has increasingly impacted Malaysia’s 15 million work force over the years and more so now due to the economic fallout as a result
of the Covid-19 pandemic.”

Solomon said the revision also showed the government had taken seriously the findings of Philip Alston, the former United Nations special rapporteur on extreme poverty and human rights, whose report debunked Putrajaya’s earlier claims that poverty had been virtually eradicated in Malaysia.

He said although the poverty rate had dropped from 7.6% in 2016 to 5.6% last year, it was likely to worsen considerably in the coming months as thousands of workers had been laid off or forced to take pay cuts.

As such, MTUC looked forward to more effective public policies which would create jobs and enable workers to have better wages, more disposable income as well as an increase in their EPF savings.

He said income inequality was widening and the workers’ share of the nation’s prosperity had been reduced to “almost nothing”, and urged authorities not to leave it to “market forces” or offer excuses “as often given by employers and politicians”.

Solomon also said that with the new PLI set at RM2,208, the minimum wage of RM1,100-RM1,200, especially for urban areas, was no longer realistic or in tandem with the cost of living.

“As the poverty index is now set at more than RM2,000, surely the minimum wage must also be adjusted accordingly,” he said.

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