Kelantan remains stuck in low-wage cycle

Why wages lag in some Malaysian states?

10 Feb 2024 05:01pm
Photo for illustration purpose only. - Photo generated via Canva
Photo for illustration purpose only. - Photo generated via Canva

SHAH ALAM - Malaysia's Department of Statistics (DOSM) released their Worker Wage Statistics Report (Formal Sector), revealing three states with significantly lower average monthly wages compared to the national average.

Kelantan, Perlis, and Sabah recorded averages of RM1,600, RM1,600, and RM1,800 respectively, falling short of the national average by RM1,000.

This indicates a significant difference of RM1,000 compared to the national average wage rate of RM2,600 and is notably lower than the other 10 states in the country.

Records also indicate that in 2020, Kelantan recorded a median monthly wage of RM1,343.

Kelantan has remained the state with the lowest median monthly wage in Malaysia for four consecutive years, despite increases to RM1,681 and RM1,632 in 2021 and 2022, respectively.

Perlis reported a median monthly wage of RM1,571 in 2020, which rose to RM1,797 in 2021 and RM1,872 in the subsequent year.

Sabah, on the other hand, had a median monthly wage of RM1,716 in 2020.

However, this increased to RM1,930 in 2021 and surpassed the RM2,000 mark in 2022, recording an average wage of RM2,015.

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University Sains Islam Malaysia (USIM) Economics and Muamalat Faculty, Banking and Islamic finance lecturer Dr Mohd Faisol Ibrahim said several factors contributing to the lowest median wages in these three states.

"Firstly, the economic background of these three states is not highly industrialised, resulting in a scarcity of opportunities to create many high-wage jobs.

"Low living costs also contribute to these states recording the lowest median monthly wages.

"The existing weaknesses in the economic structure, attempting to transition towards generating high incomes, also contribute to this issue.

"The lack of economic foresight by inexperienced state leadership and unclear directions also play a role in the lowest median monthly wages in Kelantan, Sabah, and Perlis," he told Sinar.

Meanwhile, Kelantan Deputy Menteri Besar Datuk Dr Mohamed Fadzli Hassan stressed that the monthly wage rate in a state is contingent on economic activities.

"Kelantan relies on agriculture-based economic activities.

"Consequently, the median monthly wage is only around RM1,600.

"Secondly, the cost of living in Kelantan is lower than in other states, leading to its recording the lowest median monthly wage in the country," he said.