Ask yourself, how much's your salary increased compare to the cost of foods and goods?
Do you feel the pinch, I am sure you do.....
Can we do anything?
Rising prices, stagnant incomes put squeeze on middle class
By Lee Wei LianPETALING JAYA, Dec 17 — As a working professional who enjoys eating out James Yip noticed the charges on his bills have crept up significantly within the last year.
He says that a dinner for two at his favourite outlets used to cost him about RM30 for two but that has risen to RM50 or RM60 now.
Yip, a senior consultant attached to a top US multinational, also noticed his grocery bills creeping up from RM30 to RM50 per week for him and his wife and this has led to him opting for cheaper brands than what he would normally buy.
Malaysians like Yip are feeling pressured by seemingly runaway inflation that has outpaced the rise in income levels, resulting in a cut in living standards.
For people like him, reports that inflation is on the downtrend and will only be between 1 and 2 per cent for the year are met with disbelief.
"I don't think it is accurate," he told The Malaysian Insider.
While the financial stress has been bearable so far, some say that if the trend continues, it could become a major problem.
"People are just coping with it at the moment," said Yip.
Income levels in Malaysia, which is struggling to move up the economic value chain, have remained little changed in the last 30 years. An engineer starting work today would earn perhaps only slightly more than his or her counterpart in the 1980s.
The same is not true for the cost of goods and services, however.
The ringgit, once almost on par with the Singapore dollar, has been devalued drastically since the 1980s and has impacted purchasing power and made imported items essential for modern-day living such as computers and handphones less affordable.
Meanwhile, the cost of real estate, especially in urban areas, has spiralled upwards, making home ownership more difficult.
Years of underinvestment in agriculture and public transport have caused the import of agricultural products to become a factor in food prices and also left many Malaysians with little choice but to purchase cars by taking out hefty loans with tenures up to nine years long.
The middle class is in the situation of being neither rich enough to brush off the rapid increase in prices nor poor enough to benefit from financial allocations such as RM100 million in free shares as recently announced by the government for the urban poor.
Upper-income Malaysians continue to do well as attested by several sold out high-end property launches and openings of fancy restaurants serving menu items such as RM249 per pax champagne brunches and the number of new luxury cars appearing on the roads.
Some middle-class Malaysians have been able to maintain a decent lifestyle in urban areas despite high prices as they rely on bank loans and credit cards.
"A lot of people are living on credit," says Andy Hong, a marketing manager with a leading local tech firm. "Many will be in debt their whole life. We end up working for the bank."
David Lam, a senior manager with a foreign bank, says that he noticed that the prices of goods have increased this year but without a corresponding increase in income.
"If the issue is not resolved now, it will be a concern," he says.
There is some relief in the form of lower interest rates which lessens the burden for those who have taken housing loans and the government's proposed RM1,000 increase in personal income tax relief next year.
The lower interest rates, however, could hit those who rely on fixed deposits.
Some economists have predicted economic growth for Malaysia next year but many still feel vulnerable with news of Dubai's debt woes, high jobless rates in the US and Japan's worse than expected third quarter economic growth adding to their worries.
"There is still uncertainty about the economic climate," says Yip.
One issue affecting taxpayers, especially those that fall into the middle- and lower-income groups, is the quality of public services.
Some developed countries do impose a high income tax rate but offer in return quality and comprehensive public services such as top-notch infrastructure, public healthcare and education institutions.
Zamri Ramlan, a financial
"The taxes I have paid this year are substantial. I want to see quality public services provided in return," he said.
Yip, meanwhile, has decided to simply eat out at restaurants less.
"Instead, I go to the mamak shops more," he said.
He says that a dinner for two at his favourite outlets used to cost him about RM30 for two but that has risen to RM50 or RM60 now.
Yip, a senior consultant attached to a top US multinational, also noticed his grocery bills creeping up from RM30 to RM50 per week for him and his wife and this has led to him opting for cheaper brands than what he would normally buy.
Malaysians like Yip are feeling pressured by seemingly runaway inflation that has outpaced the rise in income levels, resulting in a cut in living standards.
For people like him, reports that inflation is on the downtrend and will only be between 1 and 2 per cent for the year are met with disbelief.
"I don't think it is accurate," he told The Malaysian Insider.
While the financial stress has been bearable so far, some say that if the trend continues, it could become a major problem.
"People are just coping with it at the moment," said Yip.
Income levels in Malaysia, which is struggling to move up the economic value chain, have remained little changed in the last 30 years. An engineer starting work today would earn perhaps only slightly more than his or her counterpart in the 1980s.
The same is not true for the cost of goods and services, however.
The ringgit, once almost on par with the Singapore dollar, has been devalued drastically since the 1980s and has impacted purchasing power and made imported items essential for modern-day living such as computers and handphones less affordable.
Meanwhile, the cost of real estate, especially in urban areas, has spiralled upwards, making home ownership more difficult.
Years of underinvestment in agriculture and public transport have caused the import of agricultural products to become a factor in food prices and also left many Malaysians with little choice but to purchase cars by taking out hefty loans with tenures up to nine years long.
The middle class is in the situation of being neither rich enough to brush off the rapid increase in prices nor poor enough to benefit from financial allocations such as RM100 million in free shares as recently announced by the government for the urban poor.
Upper-income Malaysians continue to do well as attested by several sold out high-end property launches and openings of fancy restaurants serving menu items such as RM249 per pax champagne brunches and the number of new luxury cars appearing on the roads.
Some middle-class Malaysians have been able to maintain a decent lifestyle in urban areas despite high prices as they rely on bank loans and credit cards.
"A lot of people are living on credit," says Andy Hong, a marketing manager with a leading local tech firm. "Many will be in debt their whole life. We end up working for the bank."
David Lam, a senior manager with a foreign bank, says that he noticed that the prices of goods have increased this year but without a corresponding increase in income.
"If the issue is not resolved now, it will be a concern," he says.
There is some relief in the form of lower interest rates which lessens the burden for those who have taken housing loans and the government's proposed RM1,000 increase in personal income tax relief next year.
The lower interest rates, however, could hit those who rely on fixed deposits.
Some economists have predicted economic growth for Malaysia next year but many still feel vulnerable with news of Dubai's debt woes, high jobless rates in the US and Japan's worse than expected third quarter economic growth adding to their worries.
"There is still uncertainty about the economic climate," says Yip.
One issue affecting taxpayers, especially those that fall into the middle- and lower-income groups, is the quality of public services.
Some developed countries do impose a high income tax rate but offer in return quality and comprehensive public services such as top-notch infrastructure, public healthcare and education institutions.
Zamri Ramlan, a financial
"The taxes I have paid this year are substantial. I want to see quality public services provided in return," he said.
Yip, meanwhile, has decided to simply eat out at restaurants less.
"Instead, I go to the mamak shops more," he said.
1 comment:
Yes, it pinch a lot. We have no salary hike from past one year and the prices of everything has increased badly. Even the day to day necessity stuff is like double the cost in comparison to past couple of years.
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