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Press Statement

by Lim Guan Eng

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(Petaling Jaya, Wednesday): BN Ministers should stop distorting statistics by using mean household income to describe economic well-being of Malaysians when the lower median household income paints a truer picture of the earnings capacity of ordinary Malaysians. The government had said in Parliament that the mean or average monthly household income for the Indian community in 2004 stood at RM 3,456 a month whilst Bumiputeras had RM 2,711, and the Chinese RM 4,437. As such the government claimed that Indians were not marginalized but better off than bumis. This is not the reality reflected on the ground.

Statistics if used incorrectly can lie and distort the truth. BN ministers must understand that the median household income divides households evenly in the middle with half of all households earning more than the median income and half of all households earning less than the median household income. According to the US Census Bureau, in 2006 the annual median household income in the US was US$48,201, meaning 50% of American households earned more than US$48,201 whilst 50% earned less than US$48,201 annually.

The mean household income is the income of all households is divided by the number of all households, and is usually affected by the relatively unequal distribution of income when a small number of people controls a larger share of income. The US Census Bureau said that the median household income is "considerably lower than the mean household income and statistically provides a more accurate representation." The mean household income in the United States in 2006 was $ 66,570, or $18,369 (38%) higher than the median household income.

In other words the mean or average monthly household income for the Indian community of RM 3, 456 a month, Bumiputeras RM 2,711 and the Chinese RM 4,437 could be as much as 40% higher than the actual income obtained. Does every Indian community earns RM 3,456 a month or Chinese household earns RM 4,437 a month? A figure half that amount could be more accurate.

The mean or average income data are skewed by income disparity between the rich and poor where the few who are wealthy and monopolise the bulk of the income are over-states the actual income received. I have not been able to obtain the median household income for the various ethnic communities in Malaysia from government data. Until these data are available, the government’s claims of who is better off than who would be disputed.

For this reason, the government is politicizing statistics by using mean and not median household income to enable them to claim that the income gap ratio between bumis and Chinese remained large when it was reduced from 1:1.74 in 1999 to 1:1.64 in 2004 whereas for bumis and Indians, it was only reduced from 1:1.36 to 1:1.27. Until the correct statistics are used, then only can we make reliable and accurate comparisons of actual earning capacity of Malaysians and the respective communities.