Malaysians are categorised into three different income groups: Top 20% (T20), Middle 40% (M40) and Bottom 40% (B40). This is based on the Department of Statistics’ (DOSM) Household Income and Basic Amenities (HIS/BA) survey of 2019.
Household Income and Basic Amenities (HIS/BA) survey is conducted twice every five years. Over the years, the bar for each group’s income level has increased and this is one of the indicators of economic growth.
However, recently, Prime Minister Tan Sri Muhyiddin Yassin has expressed concern that the B40 income group may have now expanded to become the B50 category – following the negative economic impact brought on by the Covid-19 pandemic.
“A major concern during our battle against the spread of the Covid-19 pandemic is the vulnerable B40 group that is most affected, which in my opinion, may have become B50. Many of those who used to belong to the M40 group have fallen into some form of poverty. This is a very serious matter,” he said.
He also noted that the government will work to address this matter, on top of addressing the issue of poverty in general within Malaysia.
So, what is B40, M40 and T20?
According to the statistic released by the Department of Statistics Malaysia, the income groups refer to household income, not individual income. So, you have to add everyone’s incomes together living in the same house to determine which group you belong to. This includes the combined income for married couples, parents with young kids and even adults who live with their parents.
The income group definitions are not fixed as the values may increase or decrease year-to-year – depending on the country’s GDP which is the reason why the median household income is used as the determinant.
For example, the median income level for each state is different and T20 median income in Kelantan, Perlis and Pahang is categorised as M40 group in Kuala Lumpur.
T20 median income in Kelantan, Perlis and Pahang, can be compared to the median income of the M20 group in Kuala Lumpur
Bottom line
The Covid-19 has given greater challenges to low-income families. They are much more likely to be unemployed, have cut working hours and challenges in home-based learning. The government need to address this matter seriously and find a way to tackle the poverty issue in general within Malaysia.
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