Miskin bandar aka Urban Poverty

Miskin bandar.
Or urban poverty in English.
I believe that's the core issue affecting 99% of Malaysian families living in urban areas.
All of you, how many of you manage to save 10% of your monthly basic salary?
Do you have savings?
Amounting to 2 months of your basic salary?
Or less?
You have credit card debt?
Or personal loans?
Do you realise why?
These few questions will unearth the fact that the cost of living for urban families is no longer affordable.
Especially those with kids.
I salute all you parents out there with 2 kids or more.
It cannot be easy.
It is not.

Just imagine, with an average household income of RM3,000.

Both husband and wife working.
Kid has to be taken care of.
Lucky if the grandparents are doing it.
Even then, it won't be free.
The milk, the diapers, food, clothing.

Let's break it down.
If unfortunate to be renting, let's say RM500 for rental.
RM500 for transport cost (or even up to RM1000 for car instalment, petrol, maintenance etc).
RM750 for food and household goods.
Another RM500 for the kids.
What does that leave the breadwinner with?

That's right, NOTHING.

I can easily pinpoint the 2 causes of low income.
But I cannot resolve those 2 issues.
Not even the Prime Minister can take care of the issue in the short term.
Even if we have a change of government, the fact remains that:

1. Business need to survive. SMEs operate with a typically low margin, over-dependent on volume basis.
Bosses WANT the profit to be as much as possible, so they will keep the payroll costs as low as possible.

2. Our economy stinks. No? Yes, it does.
Over the past 20 years, our country has not been able to improve on anything in terms of industrialisation.
Anyone seen the Auto City in Thailand? Proton eh?

Moving on.

One of my favourite things to say is that when a problem doesn't have an immediate solution, it's a temporary situation that needs to be managed until the solution is applied.

What we have is a situation, a DIRE situation.

I believe savings are at an all time low.
And consumer debt should be accumulating as the man-in-the-street tries to borrow against his future earnings.

And the government tells us that without subsidy, the CPI will be on the up.
Without a doubt.

Therefore, I don't see a happy ending for the 99%.

I see the 1% surviving whatever economic turmoil comes our way, because they NEVER needed to survive in the first place.

Perhaps this election year will see a lot of goodies thrown our way to help the rakyat get through their hardship.
But it's not a permanent solution.

I've always advocated moderation, but in this day and age, it is extremely difficult to resist keeping up with the Joneses.

So, in line with another adage of mine, which is "don't bring up an issue where you don't have the solution", here's what you, the Ordinary Joe, can do:

1. Follow the Bobby Ong economic theorem.
A year of your salary = the car you should drive
5 years of your salary = the house you should buy

2. Live without your means, which is another way of looking at no. 1.
My main analysis of the F&B industry growth shows that people are eating out as a means of convenience, but do they really know how much it's costing them each meal, each month?

3. There's no shame in living modestly.
My wife doesn't understand why I encourage her to buy kids' clothes at Giant and the pasar although we "occassionally" buy Osh Kosh, Kids Guess etc for them.

My wish for all you Malaysians this year is that we work on improving ourselves more this year, and with inner growth, we'll see our country grow too.

Have a great 2012!