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By state & territory, Kuala Lumpur (RM3,927), Selangor (RM2,964), and Penang (RM2,627) recorded median monthly wages that exceeded the national figure (RM2,600).
Malaysia's Department of Statistics (DOSM) has released its inaugural Employee Wages Statistics (Formal Sector) Report, for Q1 2023.
Launched on Friday (4 August 2023) by Minister of Economy Mohd Rafizi Ramli, the quarterly report is the first product to be successfully published using the Pangkalan Data Utama initiative, which involves the integration of various administrative, labour market-related data, DOSM said. The initiative to publish this report, it added, is in line with the increasing demand from users for frequent updates on wage statistics.
As shared further, this publication focuses on citizens who work in Malaysia's formal sector. The wages estimated refer to all monetary rewards including bonuses, commissions, and allowances paid to employees for work performed during the reference period.
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Highlights of the Employee Wages Statistics (Formal Sector) Report Q1 2023
According to the findings, despite global economic uncertainties, Malaysia's labour market continued to grow in line with the country's economic development in Q1 2023. There were 16.06mn employed persons in the quarter, comprising paid employees in both public and private sectors, employers, own-account workers, and unpaid family workers. Additionally, compared to the same month of the previous year, the number of formal workers increased by 0.9%, recording 6.45mn persons in March 2023.
Among the 6.45mn, the median monthly wages recorded in the month stood at RM2,600 – higher than RM2,564 recorded in February, but lower than in January (RM2,800).
Delving further, the report detailed the median monthly wages by gender, ethnicity, age group, and state & territory.
Statistics by gender
There were a total of 3.58mn male employees in the formal sector as of March 2023, making up 55.5% of the total and an 8% increase year-on-year (y-o-y). The median monthly wages for this group stood at RM2,664. Meanwhile, the sector comprised 2.87mn female employees (45.5%), earning a median monthly wage of RM2,545 – 8.6% more y-o-y.
Comparing the wages by gender, the report noted that male employees in formal sector earned about 3% higher median monthly wages than their female counterparts.
Statistics by ethnicity
Per the findings, all ethnic groups in Malaysia recorded increased median monthly wages for all three consecutive months. Bumiputera formal employees made up the largest composition in the workforce (61.4%, or 3.96mn persons), registering a 10% increase in wages y-o-y to earn a median of RM2,200 in March 2023. This figure rose from RM2,164 in the month before, remaining lower than in January (RM2,300).
Next, Chinese formal employees, which made up 29.4% of the sector's workforce (1.90mn persons), registered the highest median monthly wages of RM4,000 in March this year, with a 9.1% growth from the previous year – on par with February 2023, but lower than in January 2023 (RM4,745).
As for employees of Indian ethnicity, which accounted for 8% (or 513,400 persons) of the formal workforce, the median monthly wages recorded an increase this year, recording RM2,500 in March and February respectively, and RM2,757 in January.
Statistics by age group
Looking at the data by age group, the report revealed the following:
- Formal employees in the age groups of 45-49, and 40-45, which collectively make up 20% of the formal workforce, recorded the highest median monthly wages of RM3,500 each in March 2023.
- The median monthly wages for those aged 50-54 recorded a decline, standing at RM3,400 in March.
- The lowest median monthly wage was seen in those aged below 20 in March (RM1,500).
According to DOSM, the trends above align with the previous months, "indirectly indicating that age which is related to the level of education and work experience, affects the wage distribution of formal employees." Overall, in comparison with 2022, all age groups of formal employees experienced an increase in median monthly wages, with those below the age of 20 recording the highest increase of 25%.
Statistics by state & territory
Coming to state- and territory-specific data, the statistics showed that locations have exceeded the national median monthly wage of RM2,600 in March this year, with Kuala Lumpur recording the highest median monthly wage of RM3,927; followed by Selangor earning RM2,964, and Penang earning RM2,627.
In contrast, Kelantan, Perlis, and Sabah showed the lowest median monthly wages, each recording RM1,600, RM1,627, and RM1,782, respectively, during the same period.
The breakdown is as follows:
Analysing the data
With all of the above on hand, DOSM's analysis on the wage distribution found that 34.8% of formal employees earned below RM2,000 in March 2023, down from 40.2% recorded in the same month of 2022. This, the Department shared, is likely due to the increase in minimum wage introduced from May 2022.
The analysis further revealed:
- About 5.2% of formal employees earned the highest monthly wages (RM15,000 and above) in March 2023.
- The 10th percentile of formal employees earned wages equal to, or less than, RM1,482 per month, albeit an amount that was 27% higher y-o-y.
- Formal employees at the 90th percentile earned at least RM9,100 per month, 4.6% more y-o-y.
As pointed out in the report, the wage ratio between the highest wage earner group (90th percentile) and the lowest wage earner group (10th percentile) illustrates that the higher wage earner group received wages equivalent to more than six times of what the lowest wage earner group took home.
Commenting on the report findings, Minister Rafizi said the movement of "low and slow wages" in Malaysia needs to be tackled by the government immediately, referring to the data by age as "very worrying."
In that vein, he shared that he will be presenting the Progressive Salary Policy paper to the National Economic Action Council on Monday (7 August 2023), "so that the people can enjoy a raise in salary and we can present a more thorough economic solutions to this economic structure problem."
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Lead photo & infographics: DOSM
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