I started working as a journalist 16 years ago. It was my first ever job and it was at The Sun newspaper. I remember my starting salary. It was RM2,100 per month and naturally, it wasn’t enough. It never is enough, right? But it was okay for me as a fresh graduate.
I was able to pay my bills. Of course, there weren’t many since I was only 22 years old and I was still single and living with my parents. I could even save up to buy a car and also a medium-cost apartment slightly outside of the city.
During those days, the issue of low starting salaries for fresh graduates entering the workforce wasn’t something that was a problem. 16 years later today, it is a problem. Fresh graduates now are complaining that their starting salaries are not enough.
Today, the starting salary for most jobs in Malaysia is approximately around RM2,000, depending on the industry. This means that after 16 years since I started working, the starting salary has not increased. In fact, in some industries, it seems to have even decreased.
So many people I talk to have said that the expectations by graduates these days are unrealistic and that all they want is a high salary to feed their spoilt lifestyle. Some of them even say that if they could survive on their starting salary, then these new graduates should, too.
But I have to disagree. I would not expect a graduate starting to work today to survive on the starting salary that I received almost two decades ago. Economically speaking, wouldn’t it be natural for us to actually equate inflation into it?
My parents, who are both university graduates, used to tell me that their starting salary when they first started working in a bank in the 1970s was around RM800 per month. This was more than 40 years ago.
If according to the logic of these people who say that the graduates are being unreasonable, then everyone today should be able to survive on a starting salary that my parents received more than four decades ago.
When I started working, an affordable car (in my case, it was a Proton Satria) cost me roughly RM40,000. I needed to save up 10 percent of that (RM4,000) for a downpayment and the monthly installment was about RM200.
A medium-cost apartment (I found an affordable one in Sunway) cost RM90,000. Again, I just needed to save up 10 percent for the downpayment and legal fees, which came up to about RM12,000. The monthly instalment worked out to around RM450.
On a starting salary of RM2,100, these two initial but essential commitments were affordable. I managed to save up and also pay off the instalments (which didn’t come to more than 30 percent of my monthly income).
Making a comparison
Now, let’s take a look at the cost of living today. To keep things simple, let’s just take the two costs that I have mentioned, a vehicle and residential property, to make a comparison with what I had to go through years ago.
What is a cheap car these days? A Perodua Axia would be one of the cheapest and currently, it is running at an on-the-road price of roughly RM40,000. It is almost the same price as my Proton Satria way back then.
But an Axia is not equivalent to a Proton Satria. A current equivalent to a Satria would probably be a Proton Persona and that is currently selling for close to RM50,000. So clearly, there has been an increase in cost, if not slightly.
Now we take a look at residential property. Now here is where the significant increase in cost can clearly be seen. A medium-cost apartment like mine (which cost me RM90,000) would now cost about RM400,000 to purchase.
Saving up for the downpayment would take forever for someone who has just started working. And then there are the monthly instalments to worry about. A 90 percent loan over a 30-year tenure would be roughly be RM1,300. A little too high for a monthly salary of RM2,100.
Realistically, there are so much more increases in costs in our lives these days than just property and vehicles. How many of us have mentioned to others or ourselves that a packet of nasi lemak used to cost only RM0.50 whereas it now costs RM2?
It is impacting everyone and I think to improve this situation, employers need to think really hard to provide proper wages for their employees. Of course, the authorities also play a very key role because they have the responsibility of forming policies.
If cost is really the problem, then employers probably need to make sure that their revenue stream is stronger. And if the economy is the problem, then those in the government need to ensure that is stronger. Those are their responsibilities.
And those who are already in the workforce should stop sabotaging the younger generation by saying that they are spoilt and have delusional expectations. We need to make sure that our society develops and progresses into a high-income nation.
When my parents entered the workforce in the 1970s, they could buy a terrace house for RM30,000 and the loan tenure in those days were rarely even over 10 years. A decent car cost RM10,000. So their starting salary of RM800 to RM1,000 was adequate.
It’s simple logic, really.
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