By Business Times
KUALA LUMPUR: Household income per capita is a commonly used economic measure — the total income of a household divided by the number of people in it. It's useful, but only if used correctly.
Bill O'Reilly, the former Fox News anchor known more for volume than nuance, recently took a swipe at Malaysia, citing the country's lower household income per capita as proof that Malaysians have "no money."
Let's be clear, comparing Malaysia's household income per capita to the US without context is not just misleading, it's economically illiterate.
In 2022, Malaysia's household income per capita stood at about US$5,700, while the US was at US$41,800. The numbers are far apart, but here's why the conclusion O'Reilly drew from them is completely off the mark.
1. Income is meaningless without cost of living
A dollar in New York City, where O'Reilly sits in a studio, barely buys a hot dog. In Kuala Lumpur, a few ringgit can cover a full meal. Malaysians may earn less in absolute terms, but they also spend far less to maintain a decent lifestyle.
In other words: RM5,000 a month in KL gets you housing, food, transport and even some savings. In NYC, good luck doing the same with US$5,000 — rent alone could wipe that out.
2. Exchange rates lie — PPP tells the truth
Raw currency conversion makes Malaysia look poorer than it really is. But economists use Purchasing Power Parity (PPP) to adjust for cost of living, and when you do that, the gap narrows fast.
Real example: RM3,000 (US$685) in Malaysia covers rent, bills, groceries and daily transport. That same US$685 in New York might not even get you a windowless room in Queens.
3. Healthcare: RM1 vs US$400
Malaysia's public healthcare system is heavily subsidised. An outpatient visit costs RM1 (that's 23 US cents) and just RM5 for a specialist.
In the US, the average outpatient visit? Over US$400 according to a study, not including "facility fees", lab work, or your Uber home after fainting from the bill.
Higher income doesn't mean better access, just higher risks if you can't afford insurance.
4. Averages can lie
"Per capita income" is just a fancy average. One billionaire can make the number look impressive even if millions are struggling.
Case in point, a Wall Street executive earning US$10 million inflates the average. Meanwhile, a barista juggling two jobs without health insurance sees none of that.
5. You can't compare apples to aircraft carriers
Malaysia is a growing, middle-income country. The US is a mature, high-income economy. Comparing the two on one raw figure, especially one distorted by exchange rates, is not analysis. It's economic bravado dressed as journalism.
Source : explainer-why-comparing-malaysias-income-us-misses-mark