Kuala Lumpur: Malaysia has the highest rate of income inequality among peers nearing high-income status, with inter-ethnic disparity being the biggest contributor despite the widely-held belief that wage gaps between races are bigger, according to the World Bank’s latest report released this morning.
The report, which deep dived into the evolution of inequality and mobility in Malaysia over the last two decades and into the post-Covid era, bucked previous studies that only focused on ethnic gaps or regional disparity.
The Bank said the latest study emphasises that a great extent of inequality occurs within these groups, and highlights the intersection of ethnicity and location as a salient marker of inequality.
“Nationally, the majority Bumiputera’s average income is still lower than that of Chinese Malaysians and Indian Malaysians, although the gap has slowly narrowed over the last 20 years,” it said.
“(But) averages mask differences within groups, however. In 2022, only 13 per cent of total income inequality in Malaysia was explained by differences in average income across ethnicities; 87 perc ent reflected differences within each group.”
The report includes income inequality trends since the Covid-19 pandemic, utilising the most recent household survey data from the 2022 Household Income, Expenditure and Basic Amenities Survey (HIES/BA).
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