BY AISYAH AZZAHRA SUHIRI
KUCHING: A leading economist said it was crucial for Malaysia to revise the country’s minimum wage.
Datuk Dr Madeline Berma concurred with Deputy Human Resources Minister Datuk Awang Hashim on the need to analyse and refine of the minimum wage review by the National Wage Legislative Technical Committee (JTPGN).
“Increasing the minimum wage is necessary to reflect productivity and rising cost of living in the country.
“Many studies have proven that the minimum wage in Malaysia is low and is suppressed,” she said.
She pointed out that according to the International Labour Organisations (ILO) in its Global Wage Report between 2020 and 2021, Malaysia’s growth of real minimum wage was below the labour productivity growth, implying that the minimum wages do not keep up with rising workers productivity.
However, businesses have argued that increasing the minimum wage would tighten the profit margin and encourage layoffs, said Madeline.
She mentioned that according to the ILO Global Wage Report between 2020 and 2021, the minimum wage in developed countries was around 55 percent of their median wages, and 67 percent in developing and emerging countries.
“Meanwhile, according to the Department of Statistic Malaysia in its 2020 Salaries & Wages Survey Report, the median wage for Malaysia as of last year was RM2,062.
“Based on this median income, the minimum wage should be RM1,134 for Malaysia, RM944 for Sabah and RM876 for Sarawak,” she said.
She stated that the median monthly wages for Malaysians have increased steadily over the past decade, from RM1,500 in 2010 to RM2,442 in 2019 – before dropping to RM2,062 in 2020.
Madeline said the Covid-19 pandemic had resulted in a setback of median salary levels to around four to five years ago, namely at RM2,000 in 2016 and RM2,160 in 2017.
Therefore, she opined that Malaysia should revise its minimum wage to a higher level of 67 percent, taking the minimum wages in developing countries as the benchmark instead of the developed countries.
“The revised minimum wage should be RM1,381.54 for Malaya, RM1,150 for Sabah, and RM1,067 for Sarawak,” she added.
She said that a change in the minimum wage would help enhance the income of people in the B40 category.
However, she noted that a hike in minimum wage would lead to a higher cost of living as businesses would raise prices to maximise profits.
“In planning for a new and better ‘normal’, adequate minimum wages – statutory or negotiated – could help to ensure more social justice and less inequality,” she added.
