There were several intemperate responses in the Malaysiakini comments’ section to the call by the Socialist Party of Malaysia (PSM) for a monthly pension of RM500 for all those aged 65 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 gross domestic product (GDP) had grown from RM10.7bn in 1970 to RM1.5tn in 2019.
However, since the cumulative inflation rate over the last 50 years was 500%, the GDP in 2019 would be only RM300bn when measured in 1970 ringgit – but still, that’s a 28-fold increase.
When we factor in the three-fold increase in the Malaysian population from 1970 to 2019, we find that per capita income in real terms increased about nine-fold in that 50-year period.
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Second, 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 and business people, small and medium-sized enterprises and others which generated the growth in the wealth of this country.
However, the real income of ordinary workers and farmers did not go up nine-fold in the 50 years from 1970 to 2019.
The median wage of factory workers in 2019 was RM1,800. When we divide that by five to express it in 1970 ringgit, it is RM360 – a little higher than the median factory wage of RM250 in 1970, but not even a two-fold increase despite per capita income increasing nine-fold.
Third, 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 foreign direct investments.
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 RM11,000 per month, while a school cleaner in Malaysia gets RM1,500 if she is lucky – seven times less.
The World Bank would like us to believe this is due to low productivity by our workers. The real cause is the way the global economy is structured so that the MNCs can leverage their market power to suppress wages and commodity prices in developing economies.
Four, there are some “lazy”, ‘apathetic”, or “defeatist” individuals among the lower income and middle-income groups. But laziness is not the main cause of their dismal level of savings when they enter their senior years. Rather, the main cause is that their wages have been low throughout their working lives.
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 RM1m.
Currently, two-thirds of Malaysians over 70 depend on their children for their food, accommodation and other basic needs. For this bottom two-thirds of our population, this is demeaning and disempowering, as generally, their children are also struggling financially with higher costs such as housing expenses and the costs of raising their children.
These unfortunate seniors are robbed of their dignity and self-pride by the circumstances they are now in. This is rather unfair given that they too contributed to the growth of this country’s economy during their working years.
All those who strongly disagreed with the PSM pension proposal should visit people in the bottom 60% category and talk to those who are above 65 to see how they are coping financially.
Six, it is the responsibility of all of us, including the government and the detractors of this senior citizens’ 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 those individuals who said it is irresponsible to merely propose programmes without suggesting where the funds could come from.
PSM intends to organise a couple of roundtable discussions over the next six months to discuss the different ways 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.
AGENDA RAKYAT - Lima perkara utama
- Tegakkan maruah serta kualiti kehidupan rakyat
- Galakkan pembangunan saksama, lestari serta tangani krisis alam sekitar
- Raikan kerencaman dan keterangkuman
- Selamatkan demokrasi dan angkatkan keluhuran undang-undang
- Lawan rasuah dan kronisme
Excellent essay. I agree with Dr Jeyakumar that each of us must reflect on how to help our elderly who are in deep financial need. Yes there has to be practical ways to budget for a more just, equitable distribution of the wealth of the nation. Our very conscience cries out for us to return dignity to the elderly as they live out the last seasons of Life. Unless we have NO MORAL COMPASS except the dollar sign to guide us.