Apparently, employers in Malaysia make up some of the stingiest paymasters in the whole of Southeast Asia, according to a report by major newspaper Utusan Malaysia.
Compared against regional neighbors, it seems as though Malaysian businesses only contribute 25 percent of the country’s gross domestic product (GDP) as wages to workers, as opposed to Singapore’s 40 percent, Indonesia’s 84 percent, and 76 percent in the Philippines.
These figures factor in the population size of the countries mentioned above – with Malaysia having 33 million people, Singapore at 5.6 million, Indonesia at 273 million, and the Philippines at 109 million people.
Speaking about the matter with the publication, Abdul Halim Mansor – the President of Malaysia’s Trades Union Congress (MTUC) – said that Malaysia’s numbers absolutely did not make sense considering how most employers in the country on average were more than able to provide wages higher than the stipulated minimum of RM1,200 (US$287).
He said that despite the financial downturn caused by the pandemic, the Malaysian government had done plenty to help by providing financial assistance in the form of stimulus packages, grants, and wage subsidies.
He also referred to the recent discussions surrounding the raising of minimum wages to RM1,500 (US$358), and lamented the fact that many were still hesistant about taking up such a mandate.
“They keep reiterating that now is not the right time to increase the minimum wage to RM1,500 because of the economic difficulties and COVID-19,” he said to Utusan Malaysia. “This excuse has now become the standard, even if the government has initiated various assistance programs worth billions of ringgit.”
Malaysian bosses should do better, he says.
Just recently, Malaysia’s human resources minister M Saravanan announced that a minimum wage increase to RM1,500 could be expected by the end of 2022, with a final amount to be confirmed pending an approval by the cabinet. The last time Malaysia saw an increase for the minimum wage amount was in February of 2020, when the rate was increased from RM1,100 to RM1,200 (US$287).
This was heavily opposed by various sectors including the Malaysian Employers’ Federation (MEF) – who said that such a move would only benefit foreign workers in the country, as well as the Federation of Malaysian Manufacturers alongside a number of other economic analysts.
Abdul Halim criticized these notions and highlighted how Malaysia-based workers were now being made to work harder for less in return.
“Employers should want their workers to have more spending power, not make them go further into debt,” he said. “When salaries are low, this gives way to people having more debts to pay, and they have to work even longer hours because of it.”
“Comparatively, Malaysian employers only spend around 25 percent of the GDP to pay employees, making Malaysia the stingiest country in Southeast Asia in this regard.”
Finally, he also pointed out that when Malaysia first implemented a minimum wage system in 2013, the rates saw Peninsular Malaysian workers earn a minimum of RM900 (US$215), while those in Sabah and Sarawak took in a minimum of RM800 (US$191) monthly. He said that during that time, Malaysia’s economy was experiencing steady growth, although little has changed in entry-level pay grades since then.
“There were more companies being started, and foreign investment was flowing into the country,” he said. “Now, the government must pay close attention to the needs of the people – they’ve suffered a lot, and have had to draw from the Employee’s Provident Fund to survive. Employers should also be more caring.”
He concluded by saying that workers were the backbone of the country, and that by giving them better livelihoods, employers were also bound to reap the benefits.
“People now are also seeking jobs with better prospects and innovation,” he said. “A minimum wage increase isn’t just a request, it’s a necessity. We’re not asking for something unreasonable, and don’t want to bankrupt employers. We just want to see a little improvement, that’s all.”
