KUALA LUMPUR, June 9 — The Malaysian workforce remains heavily concentrated in the lower-income band, with the vast majority still earning RM5,000 or less amid persistent cost-of-living pressures.
About 70.2 per cent of formal sector workers fell within that income range as of December 2025, according to a New Straits Times report citing latest data.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the figures underline how deeply inflation is weighing on household finances, particularly in urban centres where expenses continue to climb faster than wages.
He said the squeeze is most evident among working families with dependents, where income growth has failed to keep pace with basic expenditure needs.
A typical young household in Kuala Lumpur with two small children would require about RM6,183 a month just to meet essential living costs, based on the Basic Expenditure for Decent Living (PAKW) benchmark.
By contrast, a similar family in Kuala Terengganu would need RM3,845, highlighting the widening gap in living costs across regions.
Dr Mohd Afzanizam said the issue is no longer just about how much people earn, but how far that income can stretch after debt obligations and essential spending.
He pointed to insolvency data showing personal loans as the leading driver of bankruptcy cases, followed by business borrowings, vehicle financing, housing loans and credit card debt.
Separately, Universiti Sains Islam Malaysia economics lecturer Prof Dr Nuradli Ridzwan Shah Mohd Dali said around 80 per cent of Malaysians are effectively living from paycheque to paycheque, with little financial buffer.
He said most households now channel nearly all monthly income into essentials, leaving savings either minimal or non-existent.
Nuradli cautioned that short-term borrowing is not always a sign of extreme hardship, but often reflects credit constraints or poor financial history that limits access to formal banking.
He urged those under financial strain to seek assistance from zakat institutions, welfare agencies or family support systems rather than turning to illegal lenders.
Loan sharks, he warned, only deepen long-term financial distress and trap borrowers in cycles of debt.
Date: 9 June, 2026 12:00 pm
Source: Malay Mail
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