Majority of Chinese are low-income earners, says economist

Amin Iskandar Amin Iskandar Updated 6 years ago · Published on 20 Jan 2018 7:00AM · 11 Comments

Economist Dr Muhammed Abdul Khalid says wealth inequality is highest among the Chinese compared with the Bumiputera and Indians. – The Malaysian Insight pic by Hasnoor Hussain, January 20, 2018.

THE perception that all Chinese in Malaysia are wealthy is wrong as data from government agencies indicate that a majority are wage-earners in this community, said economist Dr Muhammed Abdul Khalid.

The DM Analytics founder and chief economist said wealth inequality among the Chinese is also highest compared with the Bumiputeras and Indians.

“When we talk about inequality or poverty, the gap between the races has actually decreased, compared with 40 years ago.

“Many people think the Chinese are rich. But that is not quite right. Yes, some of them are rich, but the majority of Chinese Malaysians is working class.

“The percentage does not differ much from the Bumiputeras, who are also working class,” he told The Malaysian Insight.

Muhammed is the author of the bestselling The Colours of Inequality: Ethnicity, Class, Income and Wealth in Malaysia, published in 2014. The book has been translated into Bahasa Malaysia, Antara Dua Darjat: Agihan Pendapatan di Malaysia, and published last year.

Muhammed, who holds a doctorate from a leading university in France, said government data showed about eight in 10 Chinese were wage-earners. 

“Data from the Statistics Department in 2016 showed that 70% of the Chinese were working class, compared with 72% Bumiputera and 83% Indians.

“However, there are more Chinese employers at 8% than Bumiputera and Indian employers, which are both 3%,” said Muhammed, who was formerly economist at Khazanah Research Institute (KRI) and the Institute for Strategic and International Studies (ISIS) 

The income of wage-earners is not growing because owners and employers tend to keep a large portion of the profit for themselves instead of distributing it among the workers,  Muhammed said

“Income distribution to workers is still low. From every RM1 that we earn, how much does the government take through taxes; how much does the government earn; how much do the corporations profit? 

“Income for workers is still low compared to capitalist countries, such as the United States, Britain, and Singapore. In Singapore, the workers’ share of the economy is bigger. Here, not so much,” he said.

Near poverty

As with the other ethnic groups in Malaysia, absolute poverty rates among the Chinese have dropped, to just 0.1%. The rate for Bumiputeras is 0.5%, and Indians, 0.1%. The country’s overall poverty rate is 0.4%.

The problem, said Muhammed, is that although there are comparatively few who were impoverished, there are many living on the brink of poverty.

“This is the situation Malaysians are in, regardless of race. 

“Among the Chinese, half of those who work earn a monthly salary of less than RM2,350. This is a difference of only about RM400 from Malays who work. The majority earn low salaries, not between RM5,000 and RM6,000.”

The Chinese are adjudged wealthy because people make assessments based on what they see, Muhammed added.

“Sometimes, we sit in Bangsar and we see the Chinese and their Mercedes cars. That is an inaccurate picture. There are many more out there who are financially straitened.” – January 20, 2018.

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Comments

  • Tell that to ISMA, Pekasa, and many other racists, they will say this data is false and loaded with ill intent. Chinese are poor too, yet the country's is support by them - 70% taxes were paid by Chinese.

    Posted 6 years ago by Awang Top · Reply

  • Unfortunately for Chinese in Malaysia, the government uses YTL, LGT to represent Chinese, and Ananda to represent Indians and argues as though NEP is part of the constitution. Malaysia could be as advanced as Japan if not for Razak who started NEP based on Mahathir's "Malays Dilemma" and Mahathir refused to stop NEP in 1990. The statistics are long known to the government but they continued with the racist NEP because that allowed them fixed deposit constituencies enough to stay in power.

    Posted 6 years ago by Meng Kow Loh · Reply

  • Assuming Dr. Muhummud is 70 %. This clearly show the govt FAILED IT IN NEP POLICY. There many reasons for its failure. No studies were done or if there is a study the ruling class UMNO elites REFUSE TO ACCEPT FACTS AS FACTS AS THE UMNO ELITES WERE MAIN BENEFICIARIES RATHER THEN THE POOR MALAYS . THIS IS ACHIEVED BY THE UMNO ELITES BY ADVANCING THE IDEA THAT CHINESE ARE THE RICH.....CHINESE WILL BE DPM ..PM... ISLAM WILL KILLED BY THE CHINESE, ALL PROJECT ON RACE BASE IMPLEMENTATION AND SO FORTH. IF THE GOVT SINCER IN ITS APPROACH MALAYSIA SHOULD BE BETTER OFF THEN SINGAPORE.

    Posted 6 years ago by Mohanarajan murugeson · Reply

  • The BBC World Service is among the major culprits of this dangerous misconception.

    Posted 6 years ago by Mr Anderson · Reply

  • Thanks for finally coming up with the statistics to back a situation that the current federal government has refused to acknowledge and continue to distort to favour Malay and Islamic Supremacy. If the federal government wonders why the non-Malays in general and the Chinese in particular are voting for the opposition (mind you, it is the opposition, which in GE13 includes PAS, and not just DAP as they, again, like to distort), they need to look no further. When desperate people are left out in the dark in their own country, hearing daily that some other race is more deserving than them in alleviation from poverty, they get disillusioned. Which also explains why in every by-election in any constituency with significant Chinese, it is easy to buy their votes because they think - this by election matters not to the grand scheme of things but the federal government is desperate enough to shower us with anything. Even a few hundred RM matters. So we vote for them. That's why Sungai Besar and Kuala Kangsar by-elections cannot be used as absolute barometers to determine whether 1MDB has really no impact on Malaysians or whether Amanah is in fact a weak party. We will find out soon enough in the gamble of the century. The only thing we should fear is whether the federal government will give up power peacefully. Our only assurance that they will not resort to the NSC Act to declare a state of emergency is to make sure Harapan is returned with overwhelming majority - a landslide - which is beyond dispute. Malaysians have been living under a constant state of repression that we may have collectively forgotten what it is like to be liberated and treated fairly. Malaysians, you deserve more whether you are Orang Asli or hardcore Indian, Chinese or Malay. Whatever the federal governmetn is going to shower you with going into GE13 - BR1M, promised projects - you know most of them will never be realised, and two, it is more important to vote in a government that may be politically loud/messy, but with their hearts in the right place and a desire to start clean, I can guarantee that they will do much good for the country. With a strong majority, corrupt regimes like BN with all its machinations, apparatus etc. will be swept into the dustbin of history, and a mere footnote in Malaysia's future history books. We can, and we must make it happen.

    Posted 6 years ago by Quigon Bond · Reply

  • How many chinese have you seen working at McDonalds ? How many chinese do see at the cashier counter of Tesco ? If the percentage of chinese who are working class who "do not differ much from the Bumiputeras", like this economist says, why do we not see that many chinese working at tesco's and mcdonalds? If you don't see them working at tol booths or government offices, perhaps you can say that it is lieu of racial discrimination, but why not tesco and kfc and mcdonalds and giant ? Don't tell me it is because of racial discrimination too . And how come you never hear the Chinese complain about being poor ? The Indians and the Malays complain that they are poor and are in need of assistance , but when was the last time you heard a chinese say that he or she is poor and in need of assistance ? Neither do they complain via MCA or DAP, why is that ? The Chinese complain vociferouslt about being politically sidelined and disenfranchised, but why not about being poor ? and Perhaps Economist should do more to reconcile they collate from statistics and compare it against the backdrop of everyday truths, before they come out with their conclusions . I am not saying that everyday truths are conclusive, because If there is a difference between what people see and what the research of an economists reveal , the economist should at least explain the the reason for the discrepancy, before the economist should ask the people to not trust what their eyes see , and trust instead the the conclusions of the economists, shouldn’t he ...

    Posted 6 years ago by Nehru Sathiamoorthy · Reply

    • This would be about the most moronic comment I have seen thus far. The chinese by nature are not complainers, they will fight for their rights but never publish their plight. They accept and move on to overcoming them. They have always been stoic in the face of hardships, proven by their adventures into unknown lands and environments throughout history, sacrificed, survived against the harshest of elements, build better lives. I won't say much about the other races in comparison, would not be my place. But as a student of history I needed to set this comment right. The writer obviously is not very mature in his thoughts or analysis. But then this is typical of the average Malaysian these days,products of a watered down education system and screwed up political environment.

      Posted 6 years ago by Sivalingham Raki · Reply

    • Hi, i'm chinese and let me answer some of your questions.
      1. How many chinese have you seen working at McDonalds ? How many chinese do see at the cashier counter of Tesco ? If the percentage of chinese who are working class who "do not differ much from the Bumiputeras", like this economist says, why do we not see that many chinese working at tesco's and mcdonalds? If you don't see them working at tol booths or government offices, perhaps you can say that it is lieu of racial discrimination, but why not tesco and kfc and mcdonalds and giant ?
      We label these kind of job as 'Dead jobs' because we cannot gain any skills from these jobs and there's no further advancements for our wealth being.
      2. The Indians and the Malays complain that they are poor and are in need of assistance , but when was the last time you heard a chinese say that he or she is poor and in need of assistance ? Neither do they complain via MCA or DAP, why is that ? The Chinese complain vociferouslt about being politically sidelined and disenfranchised, but why not about being poor ?
      We rarely acknowledged others that we are poor and seeks financial aid from them. Because if we do so, it means we failed to stand by our own, we will be considered as incompetent, lazy and a burden to the society.
      Hope that helps.

      Posted 6 years ago by Chinese Guy · Reply

  • So... there are less Chinese that are working class in 2016? So his statement is kind of irrelevant... there are more Bumiputera that are working class - the group that is apparently getting an advantage over the rest (look up the difference between equity and equality, you need the former for the latter).

    "Data from the Statistics Department in 2016 showed that 70% of the Chinese were working class, compared with 72% Bumiputera and 83% Indians.

    From Dr Khalid's own paper, "Household Wealth in Malaysia: Composition and Inequality among Ethnic Groups", the Chinese were the wealthiest in all wealth groups.

    Posted 6 years ago by Daud Imran · Reply

    • From the % quoted, it also means that the Majority of High-income earners are Chinese....? no?

      Posted 6 years ago by Daud Imran · Reply

  • Non-Bumiputeras have a lot to thank BN's corrupted statisticians for when it comes to the perception that Chinese are rich. NEP has worked wonders for a handful of so called Bumiputeras with the majority of Bumiputera at a median not different from their non-Bumiputera counterparts. So where did race politics go wrong? It created a pool of hardcore poor believing they have been disadvantaged not knowing by the very people who claimed to champion their rights for decades while enriching themselves.

    Posted 5 years ago by Roger 5201 · Reply