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The minimum wage continues to fall below the national poverty line, making it difficult for low-income households to maintain consistent access to nutritious food, a study by University Malaya shows.
With nearly 80% of Malaysians now residing in urban areas, access to food is no longer determined by availability but instead, affordability. Unlike rural households that may engage in subsistence farming, urban residents must purchase all their food, making income levels the key determinant of food security.
A report by the University of Malaysia, titled Food Affordability in Malaysia: When markets and money decide what to eat, revealed that while Malaysia benefits from relatively low food prices due to open trade policies and government subsidies, low wages and income inequality continue to limit many households' ability to afford adequate and nutritious food.
Moreover, despite food prices remaining below the global average in the country, it does not automatically translate into affordability for all, particularly for low-wage earners.
However, despite relatively low food prices compared to global standards, the inability of many households to earn sufficient income remains a significant barrier to food security.
The minimum wage continues to fall below the national poverty line, making it difficult for low-income households to maintain consistent access to nutritious food.
International comparisons further highlight Malaysia’s income challenge — minimum wages remain lower than those of peer countries, limiting the purchasing power of many workers.
“While a minimum-wage worker in the Netherlands needs only four minutes of labour to buy one litre of milk, a Malaysian worker must work for 58 minutes to afford the same amount”
Malaysia has long relied on extensive subsidy programmes to manage food and energy costs. Cited in the report, the Ministry of Finance's data in 2023 and Ministry of Economy's findings in 2024 noted that in 2022, a total of 15 subsidy programmes were in place across six ministries. The total allocation amounted to RM55.96bn, equivalent to 3.12% of GDP.
According to the World Bank’s Price Level Index (PLI), Malaysia’s food price level stands at 83.08% of the world average, indicating that food remains relatively inexpensive compared to global standards.
While food prices in Malaysia are lower than the global average, price levels alone do not determine whether individuals and households can access adequate and nutritious food. Even when food remains relatively inexpensive, affordability remains a challenge if incomes are insufficient to meet basic needs. The demand side of food affordability is therefore equally crucial, as it encompasses people’s purchasing power, which is shaped by income levels, wages, employment conditions, and social protection measures.
Policy recommendations to bridge the affordability gap
As the report higood affordability is not just a matter of food prices; it is fundamentally linked to household income, wage policies, and social protection mechanisms. Even in a country like Malaysia, where food prices are relatively lower than global averages, a significant proportion of the population struggles to afford adequate and nutritious meals due to low wages and inadequate income security. This affordability crisis disproportionately affects low-income urban populations, who must purchase all their food from markets and have no alternative means of food production.
While there are various important policy interventions to improve food affordability, including agricultural policies, price regulations, and trade measures, this section focuses specifically on demand-side solutions.
The report identified three key policy interventions to bridge the affordability gap and enhance food security:
- Establishing a social protection floor
- Expanding and strengthening school feeding programmes, and
- Automatic minimum wage adjustments
While these are not the only relevant policy tools, they represent feasible, evidence-based solutions that can significantly improve food affordability and economic security in Malaysia.
#1 Establishing a social protection floor
A comprehensive social protection floor is essential for ensuring income security and food affordability, particularly at critical stages of vulnerability such as childhood, old age, unemployment, and disability. During these periods, individuals and families face heightened risks of food insecurity due to income disruptions and increased nutritional needs.
In Malaysia, gaps in social protection coverage leave many individuals, particularly those in the informal sector, low-wage employment, and economically inactive, without adequate financial security. Strengthening child benefits, and income support for older persons and persons with disability would ensure that households are not pushed into food insecurity during periods of economic hardship.
By adopting a life-cycle approach, Malaysia can reduce poverty and improve long-term health and development outcomes, particularly for children and elderly populations, who are most vulnerable to nutritional deficiencies and economic instability.
#2 Expanding and strengthening school feeding programmes
A universal school feeding programme is a cost-effective intervention that addresses both food affordability and nutritional security for all children, especially those from low-income households.
Research shows that school feeding programs contribute to better concentration, reduced absenteeism, and improved educational performance, particularly for children from disadvantaged backgrounds.
Although Malaysia has existing school feeding programmes, they remain limited in coverage and quality. Expanding access to all primary and secondary school students, particularly in low-income communities, would directly improve nutritional intake and economic security for vulnerable households.
With international evidence indicating that well-designed school feeding programmes have proven beneficial, including higher educational attainment, better employment outcomes, and improved health, the nutritional quality of meals must be enhanced to ensure that school meals provide adequate protein, micronutrients, and balanced caloric intake rather than relying on cheap, processed foods.
Strengthening meal composition and diversifying food sources within school feeding initiatives can further contribute to better dietary habits and long-term health improvements among school-aged children.
#3 Automatic minimum wage adjustments
Between 2020 to 2023, Malaysia’s minimum wage remained unchanged at RM1,200 despite rising living costs, significantly eroding the purchasing power of lower-wage workers.
Following public pressure and economic considerations, the government raised the minimum wage to RM1,500 in 2023 and later announced an increase to RM1,700 by 2025.
However, these adjustments remain sporadic and reactive, lacking a structured mechanism to ensure wages keep pace with the cost of living. To ensure that minimum wage earners maintain purchasing power, Malaysia should introduce an automatic adjustment mechanism.
Some countries that benefited from the automated minimum wage indexation included France, Netherlands, and Poland.
By implementing the proposed automatic wage adjustment mechanism, Malaysia can ensure that real wages keep pace with rising living costs, preventing the erosion of purchasing power among low-wage workers. This measure would provide greater income stability, allowing households to maintain consistent access to essential goods and services, including adequate and nutritious food.
In addition, strengthening wage-setting mechanisms would also contribute to narrowing income disparities, aligning Malaysia’s labour policies with international best practices observed in countries with well-regulated wage indexation systems. More importantly, a predictable and transparent wage adjustment framework would enhance food affordability by enabling workers to sustain an adequate standard of living without financial distress.
With higher and more stable wages, low-income households would be less reliant on cheap, calorie-dense, and nutrient-poor food options, ultimately improving overall health outcomes and reducing diet-related illnesses. In both urban and rural settings, ensuring that wages are systematically adjusted in response to inflation and economic growth would mitigate food insecurity and enhance long-term economic resilience, particularly for vulnerable populations.
READ MORE: Malaysia’s labour force sees improvements, recording 16.68mn employed persons in January 2025: DOSM
Lead image / University of Malaysia
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