ANN/THE STAR – The minimum wage in Malaysia should be at least MYR2,000 monthly to cover basic living expenses in the current economic climate, say economic experts and labour players.
Leading economist Dr Geoffrey Williams said based on the inflation of the minimum wage since the last increase, the new minimum wage should be around MYR1,600, but this is too low because with statutory deductions for Employees Provident Fund (EPF), Social Security Organisation (Socso) and Employment Insurance System (EIS), the take-home pay is below the poverty line.
The founder and director of Williams Business Consultancy Sdn Bhd added that it was important to include other considerations including the minimum wage for civil servants, which at MYR2,000 served as a benchmark.
“The minimum wage for the Progressive Wage Pilot Policy scheme is MYR1,810 but again this is too low.
“Bank Negara also estimated a living wage of MYR2,700 in 2018 that would now be above MYR3,000 taking inflation into account.
“So we need to look beyond the RM2,000 amount and aim for RM2,500 and RM3,000 per month ideally,” he said when contacted by The Star. However, he admitted that employers in the country would oppose the idea of increasing the minimum wage at such rates.
“Many families struggle to make ends meet, leading to growing concerns about the wage’s adequacy.
“When comparing Malaysia’s minimum wage with other Asian countries, Singapore, one of Asia’s wealthiest nations, does not have a fixed minimum wage across all sectors but sets a progressive wage model for certain industries, often resulting in wages that far exceed Malaysia’s MYR1,500.
“For example, cleaners in Singapore can earn up to SGD1,300 (MYR4,300) monthly,” she said.
She said that a balanced approach should be taken, considering the needs of both employees and employers will be crucial in ensuring sustainable economic growth and improving the quality of life for all Malaysians.
“The government, employers, and labour organisations must work together to find a solution that benefits everyone in the long run,” she said.
Parti Sosialis Malaysia (PSM) deputy chairman S. Arutchelvan also agreed that the current minimum wage is outdated and irrelevant.
He said minimum wage should be reviewed once every two years, he said.
“The Madani government said that minimum wage for civil servants would be around MYR2,000 and the Prime Minister also asked the private sector to follow suit.
“So, MYR2,000 should be the yardstick on minimum wage,” he said.
Malaysian Employers Federation president Datuk Dr Syed Hussain Syed Husman said in any decision to increase the minimum wage rate for the private sector, the employers’ ability to implement the new minimum wage rate is the most important criteria.
“If the new minimum wage rate is set at a high level but the employer is unable to implement it, this will cause undesirable effects, especially when the employer decides to not continue operating,” he warned.
