Do you know what’s the minimum salary around the world?
Earning a salary allows us to buy things we want and need. It’s also how demand for goods and services start which then drives more jobs and the circle continues. This is why we have multiplier effects when we speak about economic growth. Today, we look at minimum wage / salary in Malaysia and also around the world. It’s interesting actually. Did you know, the minimum salary in China is higher than Malaysia while for Thailand and Indonesia it’s very similar? We did not look at the purchasing power yeah, today we just look at the actual minimum salary and I converted them into RM for your comparison.
What’s the minimum salary per month in Malaysia?
Minimum wage for Malaysia is RM1,500 except if it’s for rural areas. I personally think this salary is insufficient and companies should pay higher or else, their business is definitely not sustainable (which is why they pay so little) or they are not treating their best asset right. Either way, pay them higher versus paying only at the minimum and then complaining about not being able to hire or that the level of commitment is low.
These days, every school leaver who’s able to find themselves a motorcycle will be able to become a delivery rider and earn much higher than the RM1,500 minimum salary as required by law. It’s true that their earnings cannot keep increasing year after year because they are exchanging it via the time spent and there is a limit to how much time one could work everyday.
Plus… we have no idea yet on what’s the impact would be to all these delivery riders when petrol price increases tremendously sometime within this year. (Based in market murmurs… it’s likely to be within this year but no one knows except our PM I think)
What’s the typical minimum salary for different countries?
Translated the above into Ringgit so as to compare to Malaysia, the numbers are as follows: (true as at 18th July 2024)
China – RM1,665 per month
Indonesia – RM1,464 per month
Thailand – RM1,414 per month (using 30 days for calculation)
Vietnam – RM917 per month
Australia – RM2,776 per month (using 4 weeks for calculation)
United Kingdom – RM12,205 per month (using 8 hrs x 22 days)
Germany – RM11,139 per month (using 8 hrs x 22 days)
If you want to look at even more countries, just click here: Source: tradingeconomics.com
What about the USA?
Due to the disparity of living costs among all the states, you can see the huge difference between the highest and the lowest. Below rates are per hourly basis. In bracket is the conversation based on exchange rate on 18th July 2024. Info source: bloomberglaw.com
- Georgia: $5.15 (RM24 per hour)
- Wyoming: $5.15
- West Virginia: $8.75
- Minnesota: $8.85 (for small employers, or those with an annual gross revenue of less than $500,000)
- Puerto Rico: $9.50
- District of Columbia: $17 (RM79 per hour)
- Washington: $16.28
- California: $16
- New York City and Nassau, Suffolk, and Westchester counties: $16
- Connecticut: $15.69
Highest is in Columbia and lowest is in Georgia.
The above information is from bloomberglaw.com
Are most US states earning above the highest minimum pay of US$17 per hour?
Source: visualcapitalist.com This ranking states by the share of workers earning under $17 an hour.
The $17 threshold was chosen because of the Raise the Wage Act of 2023, a bill that’s been proposed that would gradually increase the federal hourly minimum wage to $17 by 2028.
Do read here for a lot more information on the US minimum wage. Source: visualcapitalist.com
General conclusion
There are reason(s) why some countries have a higher minimum salary than others. The reason is always due to the actual cost of living in that country. Else, the government of the country would not set any minimum wage / salary. When we convert it into ringgit, sometimes we may think they earn a lot of money but that works only if they work there and they can then spend the money here in Malaysia.
Else, they may also be struggling to pay their rental, pay for petrol to drive their cars and even potentially expensive meals in restaurant. I have been to 20 countries thus far in my life and I think anyone earning minimum salary in any country would always need some help from the government. Let’s wish for low inflation and a good and equitable minimum wage / salary for everyone.
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