I WOULD like to take this opportunity to offer a rebuttal to the Malaysian Employers Federation (MEF) yesterday.
According to its president Datuk Syed Hussain Syed Husman, increasing the minimum wage to RM1,500 would derail the economic recovery. First up, let me say that his statement was neither surprising nor makes any sense. Let me dissect his points as follows:
MEF: Now is not the right time to increase cost and the proposed RM1,500 new minimum wage implementation would derail economic recovery.
PSM: This seems to be a standard template used each and every time the minimum wages issue is brought up. Maybe Syed Hussain should tell us when is the right time to increase minimum wage because it seems there is no such time in his mind. Bear in mind that MEF has always opposed an increase on the minimum wage, be it during recession or even when the economy is booming.
MEF: We must remember that most Malaysian businesses are micro, small and medium enterprises (MSMEs), whereby 98.9% are in this group.
PSM: This statement does not say how many workers are employed by them. In any case, Parti Sosialis Malaysia (PSM) is of the view that this group needs to be helped but then the strategy should have been to tax wealthy individuals, companies and cross subsidise the SMEs who needs help.
Ironically, the MEF will oppose all measures to impose a levy on the wealthy such as Wealth Tax, Capital Gains Tax and others. These people would also be opposed to imposing a ceiling on salaries and perks for their top executives but at the same time.
Their only solution to keep costs in check is by supressing workers’ wages and ensure they are paid the lowest possible. So, the problem is not increasing the minimum wage but their mindset of not touching the salaries and perks enjoyed by their top executives.
MEF: The RM1,500 minimum wage will push up the cost of goods and services and operation costs will definitely increase.
PSM: But in the last few months, we have been seeing an increase in prices of goods but no increase in wages. So based on Syed Hussain’s logic, how did inflation soar first without wages going up? Is there something wrong on how we look at things or should we say since inflation have gone up so wages should go up as well and not the other way around?
MEF: The RM1,500 minimum wage would mostly go to foreign labour as the locals are already paid higher wages than this, and the outflow of money will further increase.
PSM: In my view, this is MEF’s way of taking cheap shot at migrant workers and perpetuating a stigma against them. So, what if those working in the dirty, dangerous and difficult (3D) jobs get paid better?
Having said that, it is also the MEF who has been constantly lobbying the Government to get more migrant workers as it goes hand in hand into their cheap labour policies. Besides, we have 300,000 Malaysians working as cleaners and security guards in Government schools and hospital, who depend 100% on the minimum wage policy. So, even this statement that all or most Malaysians earn more than the minimum wage is false!
Election ploy!
In any case, PSM looks at the statement by Human Resources Minister Datuk Seri M Saravanan that the minimum wage will be increased to RM 1,500 by the end of the year with caution and suspicion.
Firstly, the minimum wage was supposed to be reviewed and implemented beginning of this year, not end of the year. Perhaps, it is an election ploy since general election is expected to be held in the second half of this year.
For the record, both Pakatan Harapan and Barisan Nasional, in their last election manifesto, agreed to increase the minimum wage to RM 1,500 in this term. So, this RM 1,500 is not something amazing as this has been spoken for more than five years now.
We have given our views on the matter during the minimum wage technical committee. Even if we use the Government’s minimum wage formula in working out the minimum quantum, then the minimum wage for Malaysia should be RM 2,017 as shown by the table below.
In spite of that, we had maintained that minimum wage should be at least RM 1,800, a figure which is much lower that the formula used Bank Negara Malaysia.
| MALAYSIA | BANDAR | LUAR BANDAR | ||
| Note | ||||
| a | POVERTY LINE INCOME (PLI, RM) | 2,208 | 2,208 | 2,208 |
| AVERAGE WORKERS PER HOUSEHOLD | 1.2 | 1.2 | 1.2 | |
| b | MEDIAN WAGE (RM) | 2,062 | 2,268 | 1,340 |
| c | LABOUR PRODUCTIVITY GROWTH (P %) | 2.20% | 2.20% | 2.20% |
| d | CONSUMER PRICE INDEX (CPI %) | 1.70% | 1.60% | 1.50% |
| e | UNEMPLOYMENT RATE (UE %) | 4.50% | 4.60% | 4.50% |
| MINIMUM WAGE (RM) | 2,017 | 2,120 | 1,641 |
Source:
a) Laporan Survei Pendapatan Isi Rumah & Kemudahan Asas 2019, DOSM
b) Laporan Survei Gaji & Upah 2020, DOSM
c) Laporan Produktiviti 2018/2019, MPC
d) Consumer Price Index, March 2021, DOSM
e) Laporan Survei Tenaga Buruh 2020, DOSM
In a nutshell, Malaysia is a country with the second highest Gini coefficient index in Southeast Asia. it means that Malaysian have a very high-income inequality gap. So, we believe that an increase in the minimum wage can, to a certain extent, reduce this inequality gap.
It is time for us to build a more equitable society and trying to suppress wages of the our already poor citizens is not the way to go!
S Arutchelvan is the deputy chairperson of Parti Sosialis Malaysia.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
