UNICEF Study: Household Income Surges, Poverty Still Evident

UNICEF Study: Household Income Surges, Poverty Still Evident

KUALA LUMPUR: The monthly median income of households in the country has surged to nearly RM3,000, marking a 32 percent increase compared to pre-COVID-19 levels, while the unemployment rate has decreased from 12 percent in early 2021 to 5.9 percent in October last year.

Although this indicates a significant recovery effort in addressing the economic impacts of the pandemic, poverty remains evident, especially among women, children, and persons with disabilities (PWDs).

These were findings from a survey titled ‘Obstacles Along the Way: A Repeated Survey on the Post-Pandemic Cost of Living Impact on Low-Income Households in Kuala Lumpur’, conducted by UNICEF from October 14, 2023, to November 16, 2023.

Poverty remained high at 41 percent in October 2023, despite recording a decrease compared to early 2021.

Among female household heads, the poverty rate was at 59 percent, while the highest poverty rate was recorded among households led by persons with disabilities, at 67 percent.

The severe poverty rate was 8 percent, with the highest among households led by people with disabilities at 17 percent.

“Although there has been an increase in labor market activity and income, poverty remains high. You should note that the poverty rate in KL, the wealthiest state in Malaysia, is less than two percent, about 1.4 or 1.5 percent. But in low-cost flats in KL, the poverty rate is 41 percent, which is much higher. Although it has decreased from 45 percent during the pandemic, it is still very concerning.

“Among female household heads, poverty is around 60 percent, meaning 6 out of 10 live below the poverty line, and among households led by persons with disabilities, it is 67 percent.

“So income and job opportunities have improved, but many are still poor, much higher than the national or state level,” said UNICEF’s Chief Researcher, Dr. Muhammed Abdul Khalid.

The survey also found an urgent need to enhance social protection and assistance programs, especially with 40 percent of workers lacking job-based social protection, with the highest rate among self-employed individuals at 92 percent.

“Among our sample of workers, 40 percent lack social protection, and the worst among them are the self-employed.

“For an easy reference, let’s call them Makcik Kiah. 92 percent of Makcik Kiah are not protected, meaning when they make contributions, such as EPF, the majority do not benefit from them. If they go to work and something happens to them, they are not protected,” he said.

Rising food prices also caused significant financial strain on households. Eight out of 10 households struggled to generate sufficient income to meet their basic needs, and this number is higher than the 7 out of 10 reported during the pandemic.

About 90 percent of households are grappling with the effects of rising living costs, especially concerning food prices, while around 50 percent perceive their financial situation as worsening compared to 2022.

“When asked how they manage the increase in the cost of living, they say, ‘I work harder and longer, I do double the work, and I reduce my spending on non-essential items or food intake.’

“This translates to children; one out of two children eats less than three times a day, which will ultimately impact children’s well-being in the future,” he added.

Other findings from the survey also outlined several other issues, such as challenges in access to and quality of education among low-income families, mental pressure on parents exceeding pandemic levels, and cash assistance and price controls on food items being deemed as the most desired by households compared to fuel subsidies.

Therefore, to address the raised issues, UNICEF outlined several proposals and policies, including a universal allowance for all children and persons with disabilities.

This is seen as crucial in providing a level of education and income security, besides complementing existing healthcare and job protection.

For children, UNICEF proposes a RM200 allowance for all pregnant mothers every month until the age of 2 years, requiring an allocation of about RM2.2 billion annually, equivalent to 0.12 percent of GDP.

As for PWDs, the estimated cost is around RM3.2 billion, or 0.17 percent of GDP, based on the current number of registered PWDs.

Furthermore, UNICEF also suggested a review of the new minimum wage rate, with the minimum wage rate supposed to be RM2,102.27, based on the cost of living, poverty line income, median income, and current productivity.

Improvements in social protection such as EPF and SOCSO, strengthening social assistance, especially the Department of Social Welfare’s aid program, and raising awareness about sexual and reproductive health through community service programs and mental health support programs were also recommended.

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