Malaysian wages remain low despite several hotspots

Malaysia's overall economic good-news story has yet to trickle down into broad-based income growth for workers.

Some regions stand out for strong wages – like Penang, home to a tech-driven "friendshoring" investment boom. (Listed as Pulau Pinang in our first chart of state median wages, it trails only the areas around Kuala Lumpur. In terms of median wage growth, Penang tops the table, as shown in our second chart.)

However, most regions are well below the national median wage. Kelantan and Perlis stand at the lowest end of the distribution: at MYR 1,700 per month (roughly 380 USD), their median wages are only sufficient to match the new national minimum wage, which was announced on Feb. 1.

Amid persistent concern about labor's low share of Malaysia's national income (35%), the government has also stepped up pay increases for public-sector workers. Disparities remain stark between and within states; the average wage is often significantly higher than the median, suggesting that a small group of high earners is skewing the overall figures. Some states have high GDP per capita and low wages, a side effect of local resource extraction.

Structural challenges continue to suppress wage growth, despite the government's efforts. A weak organized labor movement, an economy heavily influenced by government-linked companies, and a reliance on foreign workers all contribute to this stagnation.

Given political sensitivities surrounding labor market reforms, the current administration appears to be focusing on developing the nation's human capital — a theme that is expected to feature prominently in the upcoming 13th Malaysia Plan.

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