BNM: We didn't say Malaysians are poor

PETALING JAYA: Bank Negara Malaysia (BNM) said its analysis on the living wage does not suggest that Malaysians are poor as it is just a benchmark on the income needed to attain a minimum acceptable living standard.
"It is not a benchmark to assess the extent of poverty," the central bank said in response to a news report that calls for the government to implement the living wage immediately.
BNM stressed that it is important to understand the concept fully so that any comments on the issue will not mislead and cause confusion.
The central bank's findings from conducting focus groups and price levels in 2016 showed that a family with two children will need a minimum of RM6,500 a month, while a single person RM2,700, to afford a minimum standard of living in Kuala Lumpur.
Compared with the median household income in Kuala Lumpur in 2016 of RM9,073, it was found that up to 27% of households in Kuala Lumpur were earning below the living wage.
BNM highlighted that the living wage mainly serves as a guide for employers to consider paying employees according to the needs of a minimum acceptable living standard.
"The living wage does not supersede the relevance of the current minimum wage of RM920 to RM1,000. The minimum wage is legally binding and aims to address the basic needs of households."
However, it noted that the ability to pay a living wage should be assessed with due consideration to employees' productivity, so that it does not translate into unwarranted increase in cost that might lead to higher inflation.
"In addition to meeting basic needs, the living wage also provides for a meaningful participation in society, the opportunity for personal and family development, and freedom from severe financial stress," it added.