Living on the Edge: Increased cost of living adds pressure on low-income urban families

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Among low-income families surveyed, female headed households and those headed by a person with disability face significantly greater challenges and are in more dire situations.

The Living on the Edge Key Findings launched today is a follow up to the Families on the Edge study released during the COVID-19 pandemic. It explores post-pandemic recovery pathways of these households in the context of increased cost of living, recommending strengthened social protection to ensure minimum social protection floors are available especially for the most vulnerable.

“Ensuring post-pandemic recovery means caring for the most vulnerable: low-income families, especially households headed by women and individuals with disabilities. Life isn't solely about sustenance but also about the quality of life. Investing in both ensures that children and families not only survive but flourish, nurturing a future where every individual has the opportunity to bloom” said Juanita Vasquez-Escallon, Chief of Social Policy, UNICEF Malaysia.

The Living on the Edge Key Findings show that while families have recovered in terms of employment and income, poverty persists with 41 per cent experiencing absolute poverty, and 17 per cent facing hardcore poverty. This is especially prevalent among female headed households and households headed by people by disability. Increasing living costs have exacerbate hardships, with 8 out of 10 families struggling to meet basic needs, resulting in extreme choices like reducing food intake. The impact on mental health is noticeable, with 1 out of 4 experiencing depressions, notably higher than during the pandemic.

Living on the Edge focuses on a post-pandemic survey, conducted from October 14, 2023, to November 16, 2023, with data collected from a total of 755 low-income households living in sixteen low-cost public housing in Kuala Lumpur. The sample consists of 501 households with approximately 30 per cent representing respondents previously interviewed under the FOE project, with a booster sample of 254 households consisting of households led by women. Based on the Ministry of Housing and Local Government Statistics in 2022, there are 32,762 PPR units rented out and 2,100 PPR units owned located in Kuala Lumpur.

The Living on the Edge Key Findings contains policy recommendations that include:
1. Universal childcare allowance – An affordable RM200 per month allowance for all pregnant mothers, up to the child is 2 years old would be the first step in a progressive expansion of social protection floors for children in Malaysia.

2. Universal allowance for people with disability - A universal allowance is crucial to provide an adequate level of income security and complement the existing healthcare and employment protection. Concurrently, there should be extended allowance to primary caregivers (who are mostly women) of the disabled family members.

3. Enhancements to social assistance – The Department of Social Welfare (JKM) should extend assistance to those below the poverty line income, or those households with monthly income less than RM2,589 (RM681 per capita). Currently assistance only given to households with RM1,198 per month (RM315 per capita).

4. Improved sexual reproductive health and rights (SRHR) awareness and mental wellbeing - Community outreach programs on SRHR needs to be expanded to equip men, women, and families with essential knowledge, facilitating early planning, informed decision-making, and ensuring access to preventive care. There is also a pressing need to bolster community-based interventions, including support groups, to effectively tackle mental health challenges and cultivate overall mental well-being in communities.

5. Provide Fair Wages - Taking into consideration key factors such as cost of living, poverty line income, and productivity, calculation shows that the minimum wage should be set at RM2,287 per month, instead of RM1,500 per month currently. Current living wage as proposed by the Central Bank of Malaysia is RM2,700.

6. Improved social protection - All workers regardless of status of employment to be covered by Employee Provident Fund (EPF) and Social Security Organization (SOCSO), to protect them against injury, unemployment and inadequate or no income during old age.

The Living on the Edge study is a continuation of the Families on the Edge (FOE) project, a fourphase mixed-methods longitudinal study commissioned by UNICEF and UNFPA to measure the impact of the pandemic on women and children in low-income families in Kuala Lumpur.
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The key findings can be found here: https://www.unicef.org/malaysia/reports/living-edge-key-findings

Key findings derived from the Living on the Edge study:
• Absolute poverty is mostly experienced by households headed by a person with disability (67 per cent), compared to 59 per cent of female headed households. On average, 41 per cent live in absolute poverty.
• Hardcore poverty is still a harsh reality for 17 per cent of households headed by a person with disability and 10 per cent of female headed households. 7 per cent of the children live in hardcore poverty. The increased cost of living impacted the low-income households – from reducing meals to education, to their mental health:
• 8 out of 10 families struggle to meet their basic needs, higher than the 7 out of 10 during the pandemic.
• Increased food prices, have a real impact on most low-income households (90 per cent) forcing them to make extreme choices, including reducing food intake. 1 out of 2 children are now reportedly eating less than three meals a day.
• While school fees have not changed, associated costs such as transportation, pocket money, extra-curricular activities have increased, leading to heightened concern of parents about the accessibility and quality of education.
• As a response to increased cost of living, families are working harder and spending less. This results in a negative impact on the mental health of respondents. 3 out of 4 feel adverse effects on mental wellbeing and 1 and out 4 experience depression, which is higher than during the pandemic.
• Parents of children with disabilities are additionally concerned about being able to deal with learning difficulties of their children. The final report by UNFPA and UNICEF will be available mid-2024.