Thursday, November 21

MTUC Sarawak: RM1,050 minimum wage disappointing


KUCHING: Malaysian Trades Union Congress (MTUC) Sarawak is disappointed with the negligible increase in minimum wage of a national standardised RM1,050.

It described the ceiling sum as ‘a sell out’, and not based on sustainable economic policy and the labour market.

It also believed that the RM1,050 is a ‘proposal from employers’, and not the full recommendation of the Minimum Wage Council.

The amount only represents five per cent increase when the official inflation has increased by at least 10 per cent, and labour productivity up by 8 per cent during the period under review.

The minimum wage must be recommended by the Minimum Wage Council after taking into account the relevant socio-economic factors. Its (increase) must be based on sustainable economic policy and labour market, not at the whims and fancies of politicians. Workers’ rights must not be hijacked by politics, said MTUC Sarawak secretary Andrew Lo.

“The minimum wage has been calculated based on a formula adopted by all parties of the Minimum Wage Council, taking into account relevant factors based on global best practices and the objective of the minimum wage policy.

“The factors are poverty line index/average household income earner, employers’ ability to pay, cost of living, productivity growth, and unemployment rates.”

It is therefore imperative to ensure sustainability that the minimum wage formula calculations should be consistent, and reflect the relevant values.

“During the past decade productivity growth has far exceeded wage growth. To become a high income economy with inclusiveness, the government has decided to implement a minimum wage policy.

“It is crucial to ensure that the actual productivity growth be used, not the average value of one year. Using only one year value will distort the productivity and cost of living elements in setting the minimum wage. It will further drag wage increase lower than productivity growth.

Since this is a review of the minimum wage and not the first implementation of the minimum wage, the productivity and the CPI figures should be computed on cumulative increase for the period since the last study, which was for 3 1/2 years taking into account the 1 1/2 year delay. The same rational also applies for the CPI element.

“The current minimum wage is lower in East Malaysia only because employers there have been paying lower wages since the past decades. While the aim is to have a uniform rate, this should be achieved on a gradual basis.

“To insist on a uniform rate now will risk adopting a lower rate to the detriment of workers in Peninsular Malaysia, which make up 70 per cent of the total workforce. Given the converging data, we would expect uniformity be achieved by the next review.

“With the data, we should achieve a minimum wage of RM1,500 much earlier than Pakatan Harapan’s manifesto of five years as there is a compelling data, and based on the above formula to support a minimum wage for the peninsular of at least RM1,300 and RM1,200 for Sabah, Labuan and Sarawak effective immediately and without any adverse impact on unemployment, investment and business competitiveness.