IT never goes down well, leaders telling citizens how to manage their finances. Especially when the public are more familiar with leaders who live lavish lifestyles than with those who live humbly.
The latest advice to the urban masses is that living on RM3,000 a month is “manageable”, provided one stops subscribing to Astro and owning a car. “This city is liveable for those earning RM3,000 a month, provided they do not live in luxurious places,” said Federal Territories and Urban Well-Being Minister Datuk Raja Nong Chik Raja Zainal Abidin.
What can we make of such advice? Is the minister wrong or right? And in saying what he did, is the government being callous and missing other parts of the picture?
How would earning RM3,000 a month and living in the city be manageable or, conversely, a challenge? Let’s take a single person with no dependents. By conservative estimates, there are basics to cover like the monthly car installment (RM500), phone bill (RM80), room rental (RM400), and food (RM500). That leaves about RM1,000 to spare after deducting contributions to the Employees Provident Fund, Socso and income tax.
Where goes the remaining RM1,000 or less? Working singles are likely to set aside a sum for elderly parents. Some, especially if they are the eldest child, are tasked with helping their parents save money for their younger siblings’ education. There’s petrol if one has a car, personal grooming, the occasional trip to the doctor, or a family emergency. To have quality of life, you don’t expect people not to spend money on outings with friends or on entertainment just so that their budgeting is “manageable”. After all that, is there anything left for savings?
Yes, I know of single city dwellers who don’t own a car and use a motorbike or public transport, and who don’t hang out much with friends or enjoy nice meals, so they can stretch their ringgit. Some of these people draw far less than RM3,000 a month. The starting pay for graduates can be as low as RM1,800. Among non-graduates, a clerk or a despatch rider may earn only RM800.
The above only looks at a single-person household. How much more difficult would it be for a four- or five-person household where one spouse doesn’t work? Do these families manage to save at all, or does everything go to just making ends meet? What does Raja Nong Chik expect of poor Malay Malaysian households where the median income is reportedly RM2,531 a month?
Settling for the minimum?
Those who agree with Raja Nong Chik concede that supporting a family on RM3,000 a month is a struggle, but add that a minimum level of comfort and ease can still at least be enjoyed.
What is “minimum”? If they cut their Astro subscription, there are still the five local television channels for news and entertainment. If they give up their car and rely on public transportation, they’ll still get to their destinations, albeit with a lot of time wasted. Public healthcare is cheap, public education is almost free, essential food items are subsidised, and public housing, if the family is able to secure it, is as low as RM150 a month.
“Hardship” is then relative, depending on personal and lifestyle choices. To live simply within one’s means, or to live on credit? To remain married or single? To have a few children, just one, or none at all? The difference also lies in how much convenience or inconvenience one can take, and how much comfort or enjoyment one is willing to forgo.
With RM3,000, a struggling family can make ends meet, but will be less able to afford treats or holidays for the children. A single person can afford renting his or her own room, but a household earning the same amount has no choice but to squeeze four people or more into a tiny flat.
Given the above scenarios for both a single person and a family, living on RM3,000 a month in the city might be “manageable”, albeit uncomfortable and stressful. But it makes the government’s call to “change your lifestyle”, just as it did after raising petrol prices, insulting. For many, there’s little more they can change.
Is it then realistic to expect people to continue living at the minimum of just being able to cover the basics?
Change Your Lifestyle
Of course, we have the government’s plans to raise income levels, to make Malaysia a high-income nation. But if plans for this, as outlined in the New Economic Model (NEM), are to focus on the low-income group, Raja Nong Chik, as a cabinet minister, should realise that 80% of households earn less than RM3,000 a month. Of this, the bottom 40% are earning less than RM1,500 a month.
Are there even enough households earning RM3,000 a month for him to say that living on that amount is “manageable”?
From what we’ve seen, there isn’t a concrete plan on how to raise the income of 80% of households earning less than RM3,000 a month. So far, it’s just a stated objective in the first stage of the NEM’s unveiling. Then again, the NEM apparently isn’t the government’s official position, but only a “trial balloon” by the National Economic Action Council. So says Prime Minister Datuk Seri Najib Razak in trying to distance the government from the NEM’s calls to adjust pro-bumiputera economic policies.
What then of the government’s 10th Malaysia Plan (10MP), which also targets per capita income increase? Among its objectives is to raise the average monthly income of the bottom 40% of households from RM1,440 to RM2,300 by 2015.
But it isn’t clear how the 10MP can achieve this. The status quo on bumiputera equity is retained, despite it having failed to distribute wealth equally among poor bumiputera. The plan mentions skills training for the unemployed, improving access to healthcare, housing and education, and income assistance for the poor. But all these are welfare measures rather than direct steps to increasing income.
Instead, plans for a minimum wage for security guards were scuttled, debate for and against a minimum wage aside. Calls to empower women to participate in the workforce have not been clearly translated into policy, despite the fact that the bulk of low-income earners are women.
What’s missing in public policy is a holistic perspective on just what it takes for the poor to get by daily. Little wonder, then, that some leaders can so glibly say that RM3,000 a month in the city is manageable.
Deborah Loh wishes that public transportation in the Klang Valley was more seamless and punctual so that her household could own just one car instead of two.
Read previous Sideways columns
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