Economy doing well but wages remain low, economist says

SHAH ALAM - An economist has warned the government to focus on the people’s pockets, as data shows that wages remain low despite the country’s strong economic position.

Malaysian Institute for Inclusive Development and Advancement (MINDA-UKM) director Professor Tan Sri Noor Azlan Ghazali said data on the wage structure of the formal sector, covering registered employees with employers for March 2025 shows that nearly 50 per cent of the total seven million workers earn less than RM3,000 a month.

He explained that about 22.5 per cent fall within the RM1,500 to RM1,999 income bracket, which he described as extremely low for meeting today’s cost of living.

“The country’s economic growth for 2025 is projected at 4.9 per cent, with unemployment at a low 2.9 per cent, the lowest since 2014.

“Inflation stands at 1.6 per cent, also the lowest since 2020, while approved investments surged to RM384 billion in 2024.

“Overall, Malaysia’s macroeconomic performance is good. But the key question is: what does this mean for the people if it cannot be translated into higher take-home income through better wages or pay?” he told Sinar on Monday.

According to him, the real benefits of development have yet to be fully felt by a large segment of the population, even though the country’s macroeconomic indicators continue to show strength.

“Out of total national income, only around 33 to 34 per cent is currently distributed to workers.

“Madani Economy targets labour income to reach 45 per cent by 2030, with about 16 per cent allocated to the low-income group (B40),” he added.

Noor Azlan also pointed out that one factor contributing to low wages is the large influx of foreign workers, whose presence exerts downward pressure on wages in certain sectors.

“The government needs to focus more on micro-level issues, the people’s pockets, because strong macroeconomic performance does not automatically mean people are financially comfortable.

“A minimum wage is not enough. What is needed is a decent wage that allows people to live decently,” he said.