Average monthly income and cost of living in Malaysia

January 17, 2014

 

By Michelle Brohier

Back in March 2013, the 2012 Household Income Survey announced that the Malaysian households’ monthly income rose from RM4025 in 2009 to RM5000 in 2012. It’s a 7.2 per cent increase in total, and it was even announced that all states in Malaysia recorded better average monthly household incomes with Kuala Lumpur leading with the highest growth of 14.9 per cent from RM5488 to RM8586.

Overall, the increase is a positive one, with credits due to stable and strong economy.

Yet with the prices of everyday items rising, especially since the petrol price hikes, the significance of this means very little as our spending power remains weak. But are we really that worse off? We took a look at how our spending power compares to some other countries.

Average monthly income across the globe
While the current economy is rising slowly, it’s not without its share of obstacles and troubles. Here’s a chart on the average monthly income in four countries, including Malaysia.

Country	Average Monthly Income in 2012
Malaysia	RM5000 (or RM8586 in Kuala Lumpur)
United States of America	US$4251 (RM13965)
United Kingdom	£2796 (RM15064)
Singapore	S$7570 (RM19551)

Here are some interesting notes about the average monthly income in these different countries. In America, while the average monthly income is slowly rising in the past years, it is considered flat.

These numbers show that Americans are actually earning much less than their average monthly income back in 1989, which was US$4306 (RM14145). As one American aptly described; it is a loss of a generation of economic gains for America.

The United Kingdom isn’t doing too well either due to high energy prices, making their current average monthly income the lowest in three years. In reality, household spending power in the UK has been slashed for while they do have a total income of £699 (RM3766) a week; they are left with just £155 (RM835) after paying bills and taxes.

Singapore is the only country that’s average monthly income has been growing, with it being at S$7570, an increase in the past five years.



Spending power in Malaysia vs. other countries
Despite the rise of Malaysia’s average monthly income, the cost of most items in Malaysia remains high and its citizens continue to struggle to support families and themselves.

But even so, branded coffee such as Starbucks continues to be popular despite the price hike with an average price of RM12. In America, the price of a normal Starbucks costs roughly US$1.85 (RM6), which is significantly cheaper compared to their monthly income for sure.

Even so, it was announced that Starbucks coffee prices would rise by 10 cents, showing that even America isn’t immune to the rising prices.

Eating out is also a problem here in Malaysia.

An average meal costs about RM8 to RM10 here, which takes up to RM600 or more per month.

A Big Mac at McDonalds costs RM7.95 a-la carte, while in the UK it’s £3.50 (RM19).

In terms of amount, it may seem like a reasonable price for a meal.

But based on the earlier deductions, UK citizens only have £155 to spend, so they don’t have the pleasure to buy Big Macs whenever they please.

Of course, not all countries are having it as tough as Malaysians.

While still generally an expensive country, the average monthly income for Singaporeans allows them to spend a lot more.

Whilst hawker fare in Malaysia costs RM5-6; the ‘conversion’ is 1:1 as Singaporean hawker food can also cost SGD5-6 (RM13-16). So if in terms of money value based on food purchases alone, we’re almost as good (or bad) as Singapore.

A Malaysian Dilemma
The situation in Malaysia isn’t ideal, and we all wish we could have the same sort of spending power as other countries. But on the bigger perspective, Malaysians aren’t the only ones having it tough.

Though yes, there are still many ways of which Malaysia is definitely lacking and undoubtedly a number of items 10 cents, showing that even America isn’t immune to the rising prices.
This was brought you by Michelle Brohier from RinggitPlus.com. RinggitPlus compares credit cards, personal loans and home loans to help Malaysians get more for their money.