Household income RM5,900 a month? Why it’s a lie…

Malaysian households earn RM5,900 a month? The problem about telling lies is that with time, the liar believes his own.

COMMENT

By Steven Sim

People say politicians often tell lies. But really more often than not, they give us statistics. What is the difference?

I’ll let Mark Twain tell you: “There are three kinds of lies; lies, damned lies and statistics”.

The latest statistics our government proudly brandished at us was the report that household incomes in Malaysia had surpassed RM5,900 a month.

This was presented by Abdul Wahid Omar, the former boss of Maybank roped into the Cabinet as “Economy Minister”.

Intuitively, most Malaysians know it’s a farce. Why?

Because many families we know, maybe including our own, earn much less than RM5,900 a month.

Because even the government proudly claimed that its cash transfer programme BR1M benefited 80% of Malaysian households. The only condition for BR1M is that a recipient household must earn less than RM3,000 a month.

Because as recent as September 2013, the government said that 82.5% of young Malaysians below the age of 30 earned below RM3,000 a month. These constitute more than one-third of workers in Malaysia.

Because according to the 2012 Household Income and Basic Amenities Survey (HIS/BA 2012), the bottom 40% of Malaysian households only earned about RM1,800 per month.

Additionally, while the HIS/BA 2012 already noted that the average Malaysian household earned RM5,000 a month, 50% of Malaysian households actually earned less than RM3,626 monthly.

How did this happen? Statistics, the art of telling official “lies”.

(Caveat: I love statistics because if used responsibly, they provide useful insights into reality.)

The Economy Minister used the latest HIS/BA 2014 which has yet to be published by the Department of Statistics on its website. Hence, I will use the HIS/BA 2012 to illustrate how he has cleverly used statistics to paint a rosy picture of our earnings.

Abdul Wahid used mean household income to demonstrate that we are already earning RM5,900 a month.

In the HIS/BA 2012, as mentioned above, the mean household income was already RM5,000 a month. This was basically arrived at by averaging the total income of all households with the total number of households.

As we all know, arriving at an average works well if the data set is symmetrical, i.e. if everyone has roughly the same salary. Otherwise, one or two greater values in the set will significantly skew the average from the other values.

We may just add a local twist to the famous anecdote: Bill Gates entering a workmen’s bar, immediately turns everyone into a millionaire. Similarly a minister like Abdul Wahid comes in to take an income survey and presents the mean income of the bar patrons.

On the other hand, the HIS/BA 2012 also reported that the median household income in Malaysia was only RM3,626.

Median gives a better picture of an asymmetrical set of data, that is, a set with values which differ greatly from one another. It divides the set equally into two parts above and below the median value.

Thus according to the HIS/BA 2012, 50% of Malaysian households actually earned less than RM3,626 monthly although the average income was RM5,000 a month.

Both are valid statistical outputs, so what is the problem?

If you ask me, the problem with such “dishonesty” is not so much about the government lying to us but rather the government lying to itself.

By patting its own back on the so-called achievements, the government has created a false sense of its own success, thus running the risk of ignoring the real situation and the work still needed to be done.

During my first parliamentary sitting in 2013, the same Economy Minister proudly told the House that because our country’s unemployment rate was below 4%, according to economist John Maynard Keynes, we can be deemed as having full employment.

Since then, I have been pointing out that such self-congratulatory perspectives continue to blind the government towards the real condition of employment in this country, ranging from high unemployment among young Malaysians including graduates to the issue of underemployment, from unfair industrial practices to gender discrimination in the job market, from our over-dependence on low-skilled migrant labour to brain drain.

Similarly, when someone with the stature of the Economy Minister says that we are already earning RM5,900 a month, the government risks overlooking the actual problems of low wages, high cost of living, high debts among Malaysians and income inequality.

Even with all the reports showing economic growth, we have failed in the last 20 years to achieve any significant improvement to close the gap on inequality.

According to Second Finance Minister Ahmad Husni, Malaysia’s Gini Coefficient Index, which measures inequality (0 means perfect equality, 1 means perfect inequality), was 0.431 in 2012, one of the highest in the region, compared to countries such as Thailand 0.4 and Indonesia 0.37.

Thus, the problem about telling lies is not that others will be convinced, rather its that the one telling the lies eventually believes it himself.

Steven Sim is the Member of Parliament for Bukit Mertajam