The Statistics Department announced on October 9 that the household income has improved 6.6 percent to RM5,228 in 2016 from RM4,585 in 2014.
What does this mean?
Let us take a look.
What is household income
Household income is the combined income or take home pay of all the family members in the house who are working.
This include the father, mother and the adult children if any.
The household income is the indicator to show the total income of the family.
If the family is doing well, the household income will go up.
If the family is not doing well, the household income will go down.
Generally, the economy is getting better
When the household income has gone up, what it means is that the country’s economy is getting better.
The country’s exports are doing well and the international reserves are strengthening and so is the ringgit.
Job vacancies are slowly increasing and the international investors are returning to Malaysia.
In short, the economy is slowly getting stronger and stronger.
Malaysian companies doing stronger business
When the household income is rising, what it means is that the income of companies is getting better and they are paying higher salaries.
When the economy is good, the companies business is good and the firm is able to pay better wages to the rakyat.
This is also an indicator that the economy is improving.
The higher wages is partly the reason why the household income has improved.
The rising houshold income shows that salaries are also increasing
The higher household income is proof that the salaries of the rakyat are rising and is not stagnant.
Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan said what this means is that corporations care about the welfare of the rakyat and is rewarding them.
In a Bernama report on October 9, Abdul Rahman said this is an indication that the private sector is emulating the government in rewarding their staff.
With higher income, the rakyat can spend time with their families on economic activities which will be good for the economy.
Income in rural areas have also improved
The rising household income shows that the rakyat in rural areas are also having a better standard of living.
Income of the rakyat in rural areas such as in Sabah and Pahang have also improved and is not far behind the rakyat who stays in the city.
This shows that the rakyat in rural areas have found good jobs and are saving.
Economic activities in the state are also improving and the rakyat is spending.
Poverty is also declining
The Statistics Department said the rate of poverty in the country has also declined to 0.4 percent from 0.6 percent.
What it means is that 0.4 percent of Malaysia’s 30 million population are living below the poverty line comapred to 0.6 percent before.
This shows that the standard of living for the rakyat has improved and the government’s efforst to eradicate poverty is showing results.
It also shows that the Economic Transformation Program – the brainchild of Prime Minister Datuk Seri Najib Razak – which kicked off in 2010 had come to fruition as more people escaped the poverty trap since 2009.
Self employed also doing better business
Household income is also measured by the personal income of those who are self employed.
As an example, if the person is a pasar malam trader, his income is getting better as the rakyat spends more money at the pasar malam to buy food.
The economic sentiment is getting better and the rakyat are helping to support the economy.
The self employed which are doing all sorts of business are helping the country to strengthen the economy.
The rakyat are to be commended too for being prudent
The rakyat should also be commended for their prudence.
The Department of Statistics said the rakyat only spends on necessary items such as housing, water and electricity, food, transport.
This shows that the rakyat is prudent which leads to savings.
The savings will then lead to the increase in household income.
Given to the challenging economic environment and volatilty of prices of goods in the country, the rise in household income by the rakyat is commendable.
Government also helping out
The government is also helping out to ensure that the household income can climb higher and higher.
Among them is to provide an efficient transport system for the rakyat such as the MRT, LRT, Rapid bus and a competitive gas prices for the rakyat.
With the prices of transport kept low, the rakyat will be able to save on transport cost such as tickets.
The rakyat in turn can save on petrol, road tax, insurance as well as time and energy.
The money saved can be used on other economic activities such as spending quality time with their family members.
The government can help the states which are left behind
The household survey has also included data on the districts of all states.
The government can use the data to help state governments and district offices to locate any rakyat which has a low household income and then help them.
In this way, the government can help the rakyat by giving them assistance to have a better life.
The data on household income can also help the government plan and address social and economic development more efficiently.