High Income? You Must Be Joking!

The minister of international trade and industry, Datuk Seri Mustapa Mohamed said last month that his ministry will use RM3,000 a month in salary as a proxy for high-income jobs for the time being. He says RM3,000 is a “reasonable income” for someone in the Klang Valley and that it was a good income for regions such as the east coast and east Malaysia . “You won’t be rich (with RM3,000) but you can survive,” said Mustapa but stressed that the definition was still evolving. Other criteria for high-income jobs include being value added, high technology and knowledge and skill intensive.

He however did not clarify if the 3k is net or gross.

The Hon. Minister obviously doesn’t know many people earning RM3,000 and living in the Klang Valley . If I’m not mistaken, RM3,000 is what some (lucky) fresh graduates are paid nowadays. I also heard that some drivers (chauffeurs) make in excess of RM4,000 a month including overtime pay and outstation allowances. Is the minister saying these people could be a part of the high-income fraternity (let’s disregard the other criteria at this point)?

To qualify as a ‘high income earner’, the jobs must add value, high tech and knowledge and skill intensive. If the minister says chauffeurs do not add value, low tech and unskilled; let me tell him that driving the new 7-series requires pilot-like expertise and skills. Without their drivers, top management cannot work on the road and KL life is spent mostly stuck in traffic jams (ministers won’t know this because their outriders split open the traffic for them to pass, kinda remind you of Moses eh?). Because they are driven instead of driving, the bosses can work on their blackberrys, read The Edge and undertake business negotiations in the comfort of their S-class/LS/XF back seats. Despite them earning in excess of 3,000 per month, I don’t think any chauffeur would consider themselves high income earners. RM3,000 is enough for a single person to survive in KL but for a family of 4 or 5 it could be a struggle.

A 25 year RM120,000 mortgage at current interest rates cost around 750 per month. A 7 year RM40,000 car loan attracts about 580 in monthly instalments. These two financial obligations already take up 44% of the RM3,000 monthly salary. The balance of 1,380 will not go far over 30 days let alone support the life of a high income earner.

Minister Mustapha however three days later clarified that it was MIDA and not him who gave the figure of RM3,000. “There has been some confusion” he told reporters. He added that RM8,000-10,000 would be a better definition of high income … which basically makes me a low income earner …