Stagnant wages compounding struggle with inflation

24/1/2022 3:28:00 AM

Stagnant wages compounding struggle with inflation #theSun #theSundaily #inflation #economy #pandemic #Malaysia

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Stagnant wages compounding struggle with inflation theSun theSundaily inflation economy pandemic Malaysia

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JAYAAs economist Dr Barjoyai Bardai of Universiti Tun Abdul Razak pointed out, inflation has reduced the purchasing power of the average person significantly..He said as the prices of essentials such as food and utilities rise, the household budget of low-income families would be disrupted.

He said there is now a shortage of manpower at vegetable farms in Cameron Highlands, given that many migrant workers have left amid the Covid-19 pandemic.“With the ringgit so weak, prices of imported food items invariably rise.”“Only when the recovery gains momentum and the labour markets tighten, will we see higher wages.”

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Many will have to tighten their belts further as prices continue to rise while wages remain stagnant or, in many cases, depleted as a result of the economic impact of the Covid-19 pandemic. Most have been forced to cut back on their purchases to keep their weekly grocery bills within their means. In Sinniah’s case, it is RM250 a week, which is a challenge given how much prices have risen. As economist Dr Barjoyai Bardai of Universiti Tun Abdul Razak pointed out, inflation has reduced the purchasing power of the average person significantly. “For instance, we used to pay only RM2 for a kilogramme of okra. I’m glad it’s on its way now!,” Scholz said on Twitter.

Now, it costs RM16,” he told theSun . The crux of the problem is the rising rate of inflation, and this has led to an escalation of prices of essential goods. Those in the lower-income group are the hardest hit, according to Sunway University professor of economics Dr Yeah Kim Leng. He said as the prices of essentials such as food and utilities rise, the household budget of low-income families would be disrupted. “After all, the bulk of their spending is on essential items. The cabinet is likely to pass the draft law in February and parliament is expected to adopt the higher minimum wage before the summer break.

Unfortunately for them, prices will only continue to rise as the market remains so volatile.” Yeah said that apart from inflation, which is now at 3%, disruptions in the supply chain has also pushed prices even higher. He said there is now a shortage of manpower at vegetable farms in Cameron Highlands, given that many migrant workers have left amid the Covid-19 pandemic. The departure of these workers has left many without adequate labour to work on their farms, thereby reducing supply and raising prices. Yeah said another factor that has worsened the financial situation for Malaysians is the fact that the country relies heavily on food imports. — Reuters You May Also Like.

“With the ringgit so weak, prices of imported food items invariably rise.” The bottlenecks in the global supply chain, also caused by the Covid-19 pandemic, only adds to the pain. Yeah added that while there are signs of a recovery, the slack in the labour market would continue to keep wages low. “Only when the recovery gains momentum and the labour markets tighten, will we see higher wages.” Yeah urged the government to encourage farmers to invest in high technology equipment that would reduce dependency on imports for food and labour.

Malaysia depends heavily on imports to ensure an adequate supply of food. As a result, the food import bill is staggering. In 2020, it amounted to a record RM55.5 billion. According to the Statistics Department, the country’s annual import of mutton amounted to RM879.

4 million, mango - RM87.9 million, coconut - RM266.1 million and beef - RM2.2 billion, from Australia, Thailand, India and Indonesia. The data also shows an enormous import bill for chillies, ginger and round cabbage.

Barjoyai said the supply chain must be examined carefully to determine the factors that have led to the sharp increase in prices. “We also need to know if there is anyone trying to create artificial shortages to push prices up,” he said. “The relevant ministries must investigate and find out what is causing the price increases and take action against those responsible for the price manipulation.” Barjoyai added that wages play an important role in helping people meet their obligations, but it has remained stagnant. However, he said the local workforce is as much to blame for being underpaid.

“Productivity is a problem here. Our workers tend to get complacent. They need to be more productive,” he added. SUGGESTED STORIES .