Anyone who’s tried to pay a heating bill, fill a prescription, or simply buy groceries knows all too well that the current minimum wage does not cut the mustard.
— Sherrod Brown, US senator
THE issue of minimum wage is once again grabbing the headlines.
On the one hand, employers and employers’ associations urge the government not to increase the minimum pay level.
On the other hand, trade unions and employees, especially those at the entry-level or subordinate level pay scale, hope and pray that the government increases the minimum pay level.
This latest flurry of comments was triggered when recently Human Resources Minister M Saravanan mentioned a minimum wage of “around RM1,500” a month. He said it is expected to be implemented before the end of this year.
However, he clarified that the new rate was not yet finalised and that the ministry was awaiting Cabinet approval.
Perhaps to get a better perspective on the concept of minimum wage, it is helpful to know some of the backgrounds.
The International Labour Organisation (ILO) defines a ‘minimum wage’ as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period …”
The ILO’s mandate is to advance social justice and promote decent work by setting international labour standards.
One of the critical purposes of introducing minimum wage laws is to stop employers from exploiting workers.
Additionally, it is also to ensure an adequate income for workers. This is referred to as “a living wage”, meaning the minimum amount required to provide enough food, clothing, and shelter to a wage earner.
Malaysia has been a member of the ILO for 65 years. However, only in 2013 did Malaysia implement a comprehensive system of minimum wages.
Malaysia began in 2013 with two different rates. One minimum wage rate was for Malaya at RM900 and RM800 for Sabah and Sarawak. This discrepancy and lower rate in Sarawak was apparently due to pressure from Sarawak employers.
Effective July 1, 2016, the minimum wage rose to RM1,000 a month in Malaya and RM920 a month in Sabah, Sarawak.
After that, from Jan 1, 2019, the rate was RM1,100 for Malaya and RM920 for Sabah and Sarawak.
The current minimum wage rate of RM1,200 started in January 2020 and fortunately was standardised across Malaysia.
Proponents of minimum wage argue they lead to improvements. These points include better morale, higher productivity, better standard of living, reduction in income inequality, improvement in workers’ welfare, and better employee retention, all leading to improved productivity.
On the other hand, employers cite that raising the minimum wage increases production costs and competitiveness. These could lead to fewer workers being hired, leading to higher unemployment rates.
These are just some points that have been put forward over the years and reflect both sides of the argument.
There will most likely be significant lobbying by employers not to implement it or defer it to some unspecified future date.
But then again, the politicians will have to face up to some harsh realities. There are now many newly minted UNDI 18 voters and those voting for the first time under the Automatic Voter Registration (AVR).
Many of these new voters will likely be entering the workforce soon for the first time. The others, perhaps, come from the lower-income groups. Both segments of voters would be most upset with politicians who block or resist implementing the new minimum pay rate.
After all, parliamentary elections need to be held on or before July 2023 but possibly even this year.
Therefore, when a person’s ‘rice bowl’ is disturbed, they have long memories. So there is a high probability they will remember any mutterings by politicians as to why the new rate should not be implemented.
If the approach by the federal cabinet is the often-used statement “leave no one behind” in political speeches, then the probability of the “around RM1,500” being implemented is very high.
If the “leave no one behind” statements are mere words, then there is a high likelihood of deferring the implementation of the latest proposed minimum wage.
Based on the previous increases in minimum wages, the private sector has adapted and moved on.
Likewise, I am sure they will sustain the latest proposed increases.
Personally, I am an advocate of the latest proposed minimum wage. Considering the recent increases in the cost of living, even with RM1,500, an individual will find it challenging to make ends meet, much less one with a family.
It is precisely due to the financial challenges faced by some Sarawakians that Chief Minister Datuk Patinggi Tan Sri Abang Johari Tun Openg has continued with the many aid packages.
I would say the proposed increase in the minimum wage rate is needed and fair.
The views expressed here are those of the columnist and do not necessarily represent the views of New Sarawak Tribune.
