Malaysia’s median monthly wages recorded their fastest growth in several years in 2025, signaling broader income gains among workers across the country. Data from the Statistics Department showed that the median monthly salary rose by 5.3% to RM2,940 last year, up from RM2,793 in 2024. This increase outpaced the 4.1% rise in average wages, which climbed to RM3,803 from RM3,652 over the same period.
The stronger growth in median wages is seen as significant because it indicates that income gains were not confined to higher earners but were more widespread among the workforce’s middle tier. The services sector remained the largest source of wage employment, accounting for 71.5% of wage recipients, with employment numbers rising 1.8% to 7.42 million.
Despite the positive wage developments, economists have cautioned that sustaining this momentum will hinge on productivity improvements and the creation of higher-value jobs. Dr. Carmelo Ferlito, chief executive officer of the Centre for Market Education, described the trend as encouraging for household purchasing power but noted the importance of factoring in inflation. Malaysia’s inflation averaged 1.4% in 2025 and reached 1.9% year-on-year in August 2026, meaning much of the nominal wage growth translated into real purchasing power gains.
Ferlito emphasized the need to monitor inflation pressures amid ongoing money supply growth but warned that wage increases must not outpace productivity growth to avoid straining business margins, employment, or prices. Labour productivity per hour grew by 3.7% in 2025 and accelerated to 5.5% year-on-year in the second quarter of 2026, providing a supportive environment for wage increases.
Wage disparities persisted across sectors and skill levels. The mining and quarrying sector reported the highest average monthly wages at RM6,175, followed by services at RM3,993, manufacturing at RM3,357, construction at RM3,188, and agriculture at RM2,575. Skilled workers, who made up 36.6% of wage earners, had an average monthly wage of RM5,799, compared to RM2,714 for semi-skilled workers and RM2,184 for low-skilled workers.
The quality of job creation emerged as a critical factor in boosting incomes, with the Statistics Department estimating that 35.2% of tertiary-educated workers experienced skill-related underemployment as of the second quarter of 2026. This suggests that a substantial portion of Malaysia’s educated workforce remains underutilized in roles aligned with their qualifications.
Ferlito stressed that the focus should shift from government-led re-skilling initiatives to fostering an environment where productive firms can invest, expand, and compete for labour. He argued that increased investment, technological upgrading, and business growth are essential to raising labour value and ensuring wage growth is sustainable. Larger companies, he noted, typically have greater capacity for innovation and training, which supports higher-paying jobs.
According to the Statistics Department, sustained efforts to enhance productivity, strengthen skills, and generate high-value employment will be critical to maintaining real wage growth and improving workers’ well-being under the 13th Malaysia Plan.