There were several intemperate responses in the Malaysiakini comments section to PSMs call for a monthly pension of RM 500 for all those 65 years and above who are not receiving any pension currently. I would like to correct a few misperceptions and point out a few pertinent points.
First, Malaysia is not an impoverished country. Malaysia’s GDP had grown from RM 10.7 billion in 1970 to RM 1500 billion in 2019. However, since the cumulative inflation rate over the 50 years was 500%, GDP in 2019 would be only RM300 billion when measured in 1970 ringgit – but still, that’s a 28-fold increase. When we factor in the 3-fold increase in the Malaysian population 1970 -2019, we find that per capita income in real terms, increased about 9 fold in that 50 year period.
Second point – this increase in income and wealth of the country did not come magically from the sky. It was the labour of millions of workers, farmers, sales people, businessmen, SMEs and others which generated the growth in the wealth of this country. However, the real income of the ordinary workers and farmers did not go up 9-fold in the 50 years from 1970 -2019. The median wage of factory workers in 2019 was RM 1800. When we divide that by 5 to express it in 1970 ringgit, it is RM 360 – a little higher than the median factory wage of RM 250 in 1970. But not even a 2-fold increase despite the fact that per capita increased 9 fold.
Third point – There is wage suppression in Malaysia – our workers are being paid far less than workers doing similar work in “advanced” economies. This is because Malaysia is competing with other ASEAN countries for FDI – foreign direct investment. Our low costs of production – read low wages – is one main attraction for the multinational corporations (MNCs). We now have a situation where a school cleaner in Australia gets RM 11,000 per month while a school cleaner in Malaysia gets RM 1500 if she is lucky. 7 times less. The World Bank would like us to believe that this is due to low productivity on the part of our workers. The real cause is the way the global economy is structured such that the MNCs can leverage their market power to suppress wages and commodity prices in developing economies.
Point four – There are some “lazy”, “apathetic”, or “defeatist” individuals among the B40 and M40. But laziness is not the main cause of their dismal level of savings when they enter their senior years. The main cause is the fact that their wages have been low throughout their working lives.
Point five – In Malaysia today, a long life can be a curse and not a blessing if you are not among the 30% who have either a government pension or have managed to accumulate assets worth more than RM 1 million. Currently, two thirds of Malaysians over the age of 70 years are dependent on their children for their food, accommodation and other basic needs. For the bottom 66% of our population this is demeaning and disempowering, as generally, their children are also struggling financially with housing expenses, costs of raising their children etc. These unfortunate seniors are robbed of their dignity and self-pride by the circumstances they are now in. Rather unfair given that they too contributed to the growth of this country’s economy during their working years. I would urge all those who strongly disagreed to the PSM pension proposal to go and visit people in the B60 category and talk to those above 65 years to see how they are coping financially.
Point six – It is the responsibility of all of us, including the government and the detractors of this seniors’ pension idea, to together arrange our national finances in such a way that the wealth of this nation is shared more equitably. Creating a society that is inclusive and that looks out for its seniors has many positive “externalities” some of which will benefit even the top 20% of society.
I agree with the individuals who said that it is irresponsible to merely propose programs without suggesting where the funds can be sourced. The PSM intends to organise a couple of roundtable discussions in the next 6 months to discuss the different ways by which the federal government can augment its revenue. We plan to present a working paper on this to the Ministry of Finance before the next budget. We hope that this will spark a healthy discussion on how the wealth of this country can be deployed to strengthen social protection and mitigate climate change.
Parti Sosialis Malaysia