PETALING JAYA: When Universiti Malaya economist Prof Dr Mohd Nazari Ismail started work at the university here in 1984, his monthly salary was RM1,100.
A typical lunch then cost about RM2.
“Now, the starting salary is around RM2,500, more than double what I earned then, but a typical lunch costs around RM10 – a five-fold increase,” he said.
Prof Nazari said his experience illustrates the growing gap between wages and everyday expenses.
“Malaysians are experiencing a real cost-of-living problem. Wages are not keeping up with food prices.”
Food prices have risen faster than wages in recent years, eroding Malaysian workers’ purchasing power.
Experts attribute the squeeze to employers’ reluctance to raise salaries, weak business performance and challenging labour market conditions.
The broader trend is reflected in Bank Negara’s data.
According to Bank Negara’s 2025 annual report, the overall cost of goods and services, as measured by the Consumer Price Index (CPI), rose 9.3% between 2019 and 2024, while nominal wages per worker grew by 7.2%.
The central bank noted that the gap was particularly evident in food, where prices rose faster than wages, meaning households needed to work longer to cover their usual food expenses.
Prof Nazari said lower- and middle-income Malaysians were the hardest hit.
“The main reason is that employers are reluctant to increase wages and salaries.
“This situation may be due to employers’ own financial burdens, such as debt servicing, as well as competitive pressures,” he said.
HELP University economics expert Prof Dr Chung Tin Fah said wage growth was being constrained by labour market conditions and weak business performance.
“Business, especially the retail business, is also not flourishing. The purchasing power of consumers has not kept pace with the rising cost of living,” he said.
Prof Chung said some Malaysians had to take second jobs or live with their parents to cut expenses.
He suggested that wage increases should be linked more closely to productivity rather than fixed annual increments.
On the other side of the equation, food prices have also been pushed higher by supply disruptions, said Universiti Malaya economist Prof Rajah Rasiah.
He said the Covid-19 pandemic severely disrupted food supply chains, while the war in Ukraine further worsened global shortages of grains, cooking oil and fertilisers.
“Subsequent government efforts to expand food supply through budget outlays supporting entrepreneurship and digitalisation did not solve the problem.
“Clearly, there were implementation problems. The ecosystem to stimulate it hardly evolved,” he said.
Minimum wage increases have helped address some labour issues, but he said more needed to be done to boost food production.
In its report, Bank Negara called for deeper structural reforms to address subdued wage growth.
The central bank said Malaysia must create more high-skilled, high-paying jobs and strengthen education, training and reskilling to address persistent skills mismatches.
“Without addressing these underlying conditions, wage growth could continue to lag price increases, leading to an erosion in living standards over the long term,” it said.
