Poverty: Many choices or limited choices?

Many choices or limited choices?

Other than that, modernisation and urbanisation have changed the living patterns of today’s society. Just as what we can feel ourselves, there are more and more shopping centres, popular franchise restaurants and branded shops being built. The rapid development makes us appeared having many choices but actually our choices are getting limited.

Sometimes people have to opt for drinking branded coffee which is much more expensive than the coffee in the traditional coffee shops. This is because there are less and less traditional coffee shops, while the branded coffee shops are easily found in various places. It is the fact that consumers have many choices of expensive branded coffees such as Starbucks, The Coffee Beans, Gloria Jeans Café, San Francisco Coffee and so on. However, the problem is that they lack of choices between branded coffee and traditional coffee.

In addition to that, it is easier to get various types of luxury restaurants with choices of Korean, Japanese, Indian and others as compared with affordable food stalls. For instance, those who are working in a shopping centre have to eat in an expensive restaurant or a slightly cheaper food court because they have no other choices. Otherwise, some may say that they may choose to bring their own foods or eat elsewhere with cheaper foods. However, does everyone have enough time to prepare their foods every day, or walk far or drive during their break which is only an hour?

Therefore, in today’s world, we are facing limited choices that appear to be many choices. Our lifestyle has been facing changes together with the urban development and societal development. Such transformation caused our cost of living to increase day by day. The problem is, is our income able to bear this cost of living, and is the government seeking for solution to handle the problem of cost of living, or are they continuing the political narrative that the national economy is good?

Low poverty rate vs high BR1M

According to the Report of Household Income and Basic Amenities Survey 2016 by the DOSM, the overall incidence of poverty has decreased from 0.6 percent in 2014 to 0.4 percent in 2016. This figure attempts to give an appearance that the number of families living in poverty is low. Is this true?

In Malaysia, the definition of households according to income groups are divided into bottom 40% household income group (B40) which is households with an average monthly income below RM3,860, middle 40% (M40) which is households with an average monthly income from RM3,860 to RM8,319 and top 20% (T20) which households having an average monthly income of RM8,319 and above. [10]

If we follow the measure of poverty as shown, every Malaysian would be living comfortably and nobody is living in poverty. However, in terms of income groups, many are still in the household group with an average monthly income below RM3,860. This Report also stated that 5 out of 10 households have a monthly income of RM5,228 and below.

According to the Ministry of Finance, there were around 3.6 million households receiving 1Malaysia People’s Aid (BR1M) in 2017. [11] The DOSM stated that the population of Malaysia in 2017 was around 32 million, where 28.7 million of them were citizens and the remainder were non-citizens. [12]

If we assume the average household size as 4 persons, hence there were around 7.2 million households in Malaysia in 2017. If compared with the household receipients of BR1M 2017, it shows that there were more than 50% of households in Malaysia receiving BR1M. It also means that this 50% were households with a monthly income below RM4,000.

This figure is very shocking where about half of the households all over Malaysia were having a low income and needed BR1M to deal with their living costs, despite not being under the poverty level as defined by the government.

Middle income group vs middle class

Besides that, many are caught in a middle income trap and are unable to move forward towards the high income group.

Based on the report by DOSM, the M40 household median income is RM6,275 and the national average income is RM6,958. This shows that about half of the M40 are having an income less than the national average. In reality, there is still a long way for the bottom of the M40 to achieve and advance to the high income group.

The middle income group which is M40 is linearly assumed to be the same as the middle class. This misconception makes many to think themselves as middle class.

Actually, middle income and middle class are two different concepts. Middle income is merely an indicator to measure the individual income level. Middle income is not middle class because being middle class not only depends on income but also involves other considerations. Other factors are also taken into account.

Even if you have a middle income, it does not mean that you are enjoying a middle class quality of life. A middle class quality of life is not only assessed in material terms but also in spiritual terms. For instance, while you are getting middle income, working and owning a car and a house. You look like enjoying everything owned by the middle class, but you need to work hard, doing a few side jobs, and bear house, car and credit card debts every month.

The misconception that middle income group equals middle class is just as we see many people walking in shopping centres every week, and assume that they are living a luxurious life, having high income and the government economy is good.

Therefore, the large M40 middle income group produces a misleading illusion that Malaysia is having a high percentage of middle class and seems to be nearly achieving a high income nation status. The question is, is Malaysia being on track towards a high income nation in reality?