While the feelings and data appear contradictory, we think both are true. Wages are growing relatively fast but the standard of living for the average Malaysian is not improving. The crux of the problem is in the quality of jobs being created, besides a depreciating ringgit.
Ask any Malaysian whether things are becoming less affordable and we suspect most will answer with an emphatic “yes”. It is a common lament, that wages are just not keeping up with inflation and rising cost of living. The data appears, however, to suggest otherwise. According to statistics compiled by the International Labour Organization’s Global Wage Database, Malaysia has one of the highest rates of wage increase among our neighbours, on average, second only to Vietnam. Note that this is real wage growth, adjusted for purchasing power and inflation (see Table 1). So, what gives? Are the feelings and perceptions of the majority of Malaysians not a reflection of the underlying truth?
