PETALING JAYA: Being in the M40 group (40% of the population considered to be
middle-income earners) can be a curse.
They are not rich, like those in the T20 category (20% in the top income bracket), but they are not near destitute like the B40 group (40% who are the poorest) and therefore, do not qualify for financial aid from the government.
Malaysians near the lower end of the M40 category are the worst hit by the economic fallout caused by Covid-19, perhaps even worse than those in the B40, because they are largely ignored.
These are the people who earn just over RM4,000 a month, enough to make the cut to M40, but insufficient to make ends meet if they live in urban centres, where costs are high.
Many factors are not taken into account
in such categorisations, according to economists. Among them are family size, number of dependants and where they reside.
The time has come for the government to do away with such categorisations, economist Dr Barjoyai Bardai told theSun.
Data should be collected from all households to get a better picture on the real situation of each family, he said.
“This is where big data and data analytics can help the government determine how best to provide aid where it is needed most.
“We have the Inland Revenue Board and the Employees Provident Fund to help. They can provide all the necessary data.”
He said the task of providing targeted help should go to existing government agencies such as the Economic Planning Unit.
“The pandemic has shown that such classifications do not help to determine who needs help the most. There are people in the M40 and even T20 groups who have lost
their jobs but are still stuck in the ‘wrong’ category.”
Barjoyai said many in the M40 group have, in fact, fallen into the B40 or even hardcore poor group, but there is not enough data to determine the extent of the problem.
As the fourth industrial revolution picks up, many in the lower rungs of the M40 category may no longer be employable.
“They may have to be retrained or reskilled but we still do not know how many jobs will be available for them.”
Sunway University Business School professor of economics Dr Yeah Kim Leng said the government should have an agency where people who are in need but do not qualify for formal aid, can seek help.
“Given the high number of people in the lower end of the M40 group, many households could already be in distress but the government still does not know about it. Some kind of aid must be rolled out for their benefit as soon as possible.”
Yeah said those in the M40 group who have many children will need help most urgently. “Some may not even have enough to provide for daily living expenses.”
However, he conceded that fiscal constraints may limit the government’s ability to help such people.
