Work in an Evolving Malaysia The State of Households 2020 Part II - PowerPoint PPT Presentation

Work in an Evolving Malaysia The State of Households 2020 Part II Media Briefing 3 rd November 2020 Please scan for media registration

WORK IN AN EVOLVING MALAYSIA THE STATE OF HOUSEHOLDS 2020 PART II Please scan for media MEDIA BRIEFING registration 10:00AM Opening remarks by Tan Sri Nor Mohamed Yakcop, Chairman of KRI 10:15AM Presentation of Key Findings from Work in an Evolving Malaysia by Siti Aiysyah Tumin, Nur Thuraya Sazali and Scan here for press Hawati Abdul Hamid, release, full report and Researchers at KRI accompanying materials Khazanah Research Institute 10:45AM Q&A* with Media 11:15AM End *Journalists can start to type any questions in the Q&A function at the start of presentation to be answered during Q&A session. In the interest of time, we ask that journalists keep to questions related to the Report or KRI. Thank you.

Work in an Evolving Malaysia The State of Households 2020 Part II Opening Remarks by Tan Sri Nor Mohamed Yakcop, Chairman of KRI Media Briefing 3 rd November 2020

Work in an Evolving Malaysia The State of Households 2020 Part II Key Findings by Siti Aiysyah Tumin, Nur Thuraya Sazali and Hawati Abdul Hamid, Researchers at KRI Media Briefing 3 rd November 2020

income and work Background: Linking household Khazanah Research Institute Khazanah Research Institute

+ Work in an Evolving Malaysia Employment-related income made up most of household income Share of mean household income, by household head income source, 2012 – 2019 100.0 % 6.5 7.6 Current transfers 8.5 8.2 90.0 9.7 11.4 12.9 12.9 Properties & investment 80.0 17.2 16.0 15.6 17.3 Self-employment 70.0 60.0 50.0 40.0 66.6 65.0 63.0 Paid employment 61.6 30.0 Khazanah Research Institute 20.0 10.0 0.0 2012 2014 2016 2019 Note: Data expressed in 2019 prices. 6 Source: DOS (2020b) and KRI Calculations

+ Work in an Evolving Malaysia Income gaps persists between states, as convergence has not been fast enough Real median monthly household income by state group, 1989 – 2019 AAGR A: 8.2% A: 2.5% A: 5.4% B: 7.1 B: 2.3 B: 5.7 C: 3.5 C: 2.2 C: 5.2 D: 4.6 D: 3.8 D: 5.9 MALAYSIA : 6.3 MALAYSIA : 3.1 MALAYSIA : 5.6 KL, Putrajaya & RM10,000 9,581 10,000 Group A Selangor 8,000 5,873 Johor, Melaka, N. MALAYSIA 6,000 Sembilan, P. Pinang & Group B Terengganu Labuan, Sabah & Group C Sarawak Group D 4,000 Kedah, Kelantan, 4,239 Khazanah Research Institute 2,552 Pahang, Perak & Perlis 1,708 2,000 1,338 0 1989 1992 1995 1997 1999 2002 2004 2007 2009 2012 2014 2016 2019 Note: Data expressed in 2019 prices. AAGR stands for average annual growth rate. 7 Source: DOS (2020b), EPU (n.d.c) and KRI calculations

+ Work in an Evolving Malaysia The little convergence was mainly driven by increased transfers, rather than wages Percentage point change in share of mean household income, by source for household head, by state, 2014 – 2019 Paid employment Self-employment Property & investment Current transfers KL -1.5 Putrajaya Selangor 1.2 Johor Melaka 1.9 N.Sembilan 0.7 P.Pinang Terengganu Labuan Sabah 0.8 Sarawak -1.3 Khazanah Research Institute Kedah Kelantan 1.8 Pahang 2.5 Perak 4.2 Perlis 2.9 0.0 -8.0 ppt -4.0 +4.0 +8.0 ppt Decreased income share Increased income share 8 Note: A negative percentage point change implies a decrease in the share of an income source and not necessarily a decrease in absolute RM terms. Source: DOS (2017), DOS (2020b), KRI calculations

+ Work in an Evolving Malaysia Framework in analysing economic structure, labour market and inter-state disparities Regional economic group and median household income, 2019 Perlis RM4,594 East Coast Kedah Economic RM4,325 Malaysia median: RM 5,873 Region P.Pinang RM6,169 Kelantan Terengganu Northern RM3,563 RM5,545 Corridor Sabah Economic Development Perak Region Corridor RM4,273 Pahang Selangor RM4,440 RM8,210 Labuan Sabah KL RM6,726 RM4,235 RM10,549 Iskandar Putrajaya Johor Malaysia RM9,983 RM6,427 N.Sembilan Melaka Sarawak Corridor RM5,005 RM6,054 of Renewable Energy Note: Economic region based on Sarawak EPU (2018). Map not to scale. RM4,544 Source: DOS (2020a), KRI classification and calculations Khazanah Research Institute State grouping, by household income, 2019 Periods in Malaysian economic development Group A : KL, Putrajaya & Household income ≥ 30% of national level in Period 1: Selangor Industrialisation, before AFC 1997/98 2019, Peninsular states 1989-1997 Group B: Johor, Melaka, Household income ± 20% of national level in Period 2: N. Sembilan, P. Pinang & Deindustrialisation, before GFC 2007/08 2019, Peninsular states 1999-2007 Terengganu Group C: Labuan, Sabah States in East Malaysia Period 3: & Sarawak Moderated deindustrialisation, after GFC 2009-2019 9 Group D : Kedah, Household income below national level in Kelantan, Pahang, Perak 2019, other states & Perlis

1. Different employment landscapes in different parts of Khazanah Research Institute Khazanah Research Institute the country

+Work in an Evolving Malaysia Employment moved away from agriculture to manufacturing, with limited convergence Employment share, by economic activity and state group, 1982 – 2019 Agriculture Manufacturing 50% 50 40% 40 40 30 Johor, Melaka, N. 25.0 Sembilan, P. Pinang & Group B 30 Terengganu KL, Putrajaya & 20 Group A Selangor 23.6 17.8 MALAYSIA 20 Group D Kedah, Kelantan, Khazanah Research Institute Pahang, Perak & Perlis 10 Group C Labuan, Sabah & Sarawak 10.2 10 0 0 1982 1987 1993 1999 2004 2009 2014 2019 1982 1987 1993 1999 2004 2009 2014 2019 11 Note: Data unavailable for 1991 and 1994. Shaded areas cover Period 1 (1989 to 1997), Period 2 (1999 to 2007) and Period 3 (2009 to 2019) respectively. Source: DOS (2020b), KRI calculations

+Work in an Evolving Malaysia High-technology manufacturing concentrated in advanced states Manufacturing employment and value added share, by subsector and state group, 2015 Employment Value added 100 100 100% 100% Low-tech 15.9 19.5 20.2 23.1 23.9 23.6 25.6 Mid-tech 27.9 30.5 80 80 High-tech 64.2 38.0 30.7 60 60 41.1 43.1 37.2 38.5 33.4 35.9 40 40 69.4 20.3 45.7 46.1 20 20 39.7 39.4 38.7 37.6 36.7 33.6 Khazanah Research Institute 15.5 5.1 0 0 Group B: Group C: MALAYSIA MALAYSIA Group A: Group A Group B Group C Group D: Group D MALAYSIA MALAYSIA Group A: Group A Group B: Group B Group C: Group C Group D: Group D Johor, Labuan, KL, Kedah, KL, Johor, Labuan, Kedah, Melaka, N. Sabah & Putrajaya & Kelantan, Putrajaya & Melaka, N. Sabah & Kelantan, Sembilan, Sarawak Selangor Pahang, Selangor Sembilan, Sarawak Pahang, P. Pinang & Perak & P. Pinang & Perak & Terengganu Perlis Terengganu Perlis 12 Note: High-technology manufacturing refers to E&E products and transport equipment. Mid-technology manufacturing refers to manufacturing of petroleum, chemical, rubber, plastic, non-metallic mineral, basic metal and fabricated metal products. Low-technology manufacturing refers to manufacturing of food, beverages, tobacco, textiles, wearing apparel, leather, wood, furniture, paper and printing products. Adapted from Ng, Tan and Tan (2018). Source: DOS (2017a), KRI calculations

+Work in an Evolving Malaysia Employment shifted to services, “modern” services concentrated in advanced states Employment share, by economic activity and state group, 1982 – 2019 Modern services Other services Kedah, Kelantan, Pahang, Perak & 60% 20% Group D Perlis 20 60 59.4 KL, Putrajaya & Group A Selangor MALAYSIA 56.1 Johor, Melaka, N. Group B Sembilan, P. Pinang & Terengganu 15 14.6 Labuan, Sabah & Group C 50 Sarawak 10 6.8 40 Khazanah Research Institute 5 0 30 1982 1987 1993 1999 2004 2009 2014 2019 1982 1987 1993 1999 2004 2009 2014 2019 13 Note: Data unavailable for 1991 and 1994. Shaded areas cover Period 1 (1989 to 1997), Period 2 (1999 to 2007) and Period 3 (2009 to 2019) respectively. Source: DOS (2020b), KRI calculations

+Work in an Evolving Malaysia … and “traditional services” expanded in the last decade throughout the country Change in services employment share, by subsector and state group, 2009 – 2019 8 ppt 8 0.2 “Traditional services” Wholesale & retail, transportation & storage; 4 admin & support services; 7.4 accommodation & food; 6.4 5.5 other services 4.3 4.0 “Social services” 0 -0.1 Education; health & social -1.4 work; public -2.2 -2.0 -2.3 -3.0 administration, defense & Khazanah Research Institute -1.2 compulsory social services; utility services -1.4 -0.7 “Modern services” -4 Finance & insurance; real Group A: A : KL, Putrajaya, B : Johor, Melaka, N. Group B: C : Labuan, Sabah, D : Kedah, Kelantan, MALAYSIA Group C: Group D: MALAYSIA Malaysia Group A Group B Group C Group D Selangor Sembilan, P. Pinang, Sarawak Pahang, Perak, Perlis estate; information & Terengganu KL, Putrajaya & Johor, Melaka, N. communication; Labuan, Sabah & Kedah, Kelantan, Selangor Sembilan, Sarawak Pahang, Perak & professional, scientific & P. Pinang & Perlis technical Terengganu 14 Source: DOS (2020b), KRI calculations