Hello Grasshoppa,
Recently, PM Ismail Sabri has announced that the RM1,500 minimum wage will be effective on 1st May 2022. With the hit of the recent pandemic, we’ve seen an increase in transportation cost, raw material cost, food & other costs. Those shortages of supply vs demand have caused the price to hike up. The rise of the price of chicken & egg to the rise in price for chilies, these costs will definitely be a burden to many Malaysians especially those with lower income. Malaysia is definitely not the cheapest country to live in especially with the recent price hike. A normal plate of curry mee & char koay teow currently cost me between RM6.50-RM8.50 per plate. An average price for economy rice ranges between RM5-RM15 depending on the dish that you pick. You are typically expected to pay at least RM8 per meal. If you are single & if you eat most of your meals out, you are expected to spend RM20 per day. That excludes the expenses for your meal with friends, dates, or coffee such as Starbucks. On average, you may need around RM600 per month just for your meal. Assume you decide to meal prep & cook all your meals; you may spend on average RM400 per month. This calculation is based on my assumption of the current market price for food & groceries. It may be higher or lower depending on the food that you eat or the groceries that you buy.
Another main expenses that many people will look into are transportation costs. If you don’t own a bike or car & live within Penang or KL city where you can enjoy MY50 where it covers most of the transportation routes for buses, monorail, MRT, LRT & BRT. If you own a bike or a car, you may spend between RM200-RM500 at a minimum depending on the mode of transport. This is based on petrol, loan & other miscellaneous expenses. It also depends on the bike or the car that you own. I am calculating based on the cheapest bike or car as an estimation. How about housing expenses? The cheapest house that I’ve seen that was advertised in Penang island cost RM130,000. There may be cheaper ones which I may not be aware of. Rental for a unit may be as low as RM700 for a low-cost flat or if you own an RM130,000 house, you may be paying around RM650 per month for your loan. If you are including other expenses such as maintenance, electricity bill, water bill & others, you may need to pay an extra RM100 on top of your existing rental or housing loan. Taking the minimum RM1200 wage & after deducting EPF, SOCSO & EIS, those that are on minimum wage will be left with RM1083.95 each month. As per above, imagine cooking most of your meals at home where it cost an estimated RM400 per month, you are using MY50 transport package & your house loan & other expenses cost you RM750. You will have a negative balance of RM116.05.
Let’s imagine a married couple where they earn RM3000 in total. Let’s estimate that they have a car, a house & they have 2 kids. Based on my above estimation, their transportation cost is RM500 while their house expenses would be RM750. Assuming that their food & grocery expenses for the family of 4 are RM1200. Their kid’s other miscellaneous expenses are RM300. They are left with RM250 each month. If you really look into the above calculations, do you think the minimum wage proposals of RM1500 will be enough for Malaysians or is it more important for the government to curb the cost of the rising expenses that are burdening fellow Malaysians? As a personal finance & investment blogger, politics should not be the topic that I am supposed to touch on this blog but I truly see the red flag of the current situation. While all the politicians are having internal fighting over power, who will truly care about all our rakyat that are suffering to make ends meet every day? Pandemic is unavoidable but what have the government done so far to ease all the rising costs? There may be some minimal initiatives done but it has definitely not been enough, to say the least. Raising the minimum wage is not a solution unless all other costs are under control.
OSS!
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