The Malaysian Insight

ABOUT 600,000 to one million middle-income households have been relegated to the bottom 40 group due to layoffs and wage cuts, the 2022 Economic Outlook report said. 

“The pandemic has affected every household in the country, encompassing the B40, M40 and top 20% (T20) of income groups,” the report said.

Citing data from  the Household Income Estimates and Incidence of Poverty 2020 Report(2021), 12.8% of T20 and 20% of M40 households have now been relegated to a lower-income category.

“In particular, compared to the B40 group, the M1 (the lowest 10 percentile of the M40) was more severely impacted due to the pandemic due to their high financial commitments and household expenses,” the report said.

Income per capita for 2020 shrunk by 6.5% to RM43,475 from RM46,450 in 2019, the report said citing data from the Statistics Department.

This caused many M40 households to drop to the B40 category.

This is attributed to the challenging economic climate as the country’s economy recorded a contraction of 5.6% last year. 

The number of unemployed  increased by 39.9% from 508,200 in 2019 to 711, 000 people in 2020. 

“Although the assistance packages kept the current unemployment rate below 5%, concerns about the longer-term impact of the pandemic on the lives and livelihood of the people remains,” it said. 

Youth unemployment and underemployment have risen over the years. Unemployment among youth increased to 12% to 314,000 in 2020 from 10.5% or 295,800 in 2019. 

“Likewise, time-related underemployment in 2020 rose to 2.2% of the total employed persons or 334,000 persons (2019:1.3% or 191,600 persons) due to the inability of the market to meet the increasing the demand for job seekers, especially new graduates and those retrenched during the pandemic,” it said.

Inflexible working arrangements have also discouraged more women from participating  in economic activities, the report further noted. 

It highlighted that the over reliance on foreign labour and unattractive wages have further hindered greater involvement of Malaysians in certain occupations.

Meanwhile, lack of social protection for some sector workers such as the self-employed and those in the informal sector had resulted in these sectors becoming more vulnerable during the pandemic.

According to Socso, only 6.5% of the 2.5 million self-employed people contribute to the fund, which reflects the severity of the situation. – October 29, 2021..