'Govt wastage, not minimum wage, makes country bankrupt'

Any prospect of bankruptcy is due to uncontrolled spending and has nothing to do with the implementation of minimum wage, said economist and financial consultant Dr Rosli Yaakop , responding to a remark by former UMNO strongman Dr Mahathir Mohamad.

Rosli was responding to the former prime minister's assertion that the country that if the Barisan Nasional government bowed to public pressure and set a minimum wage policy as announced over the weekend, it would lead the economy to bankruptcy such as happened in some Western economies.

Mahathir said that these Western economies went bust due to high pay for less work, and even claimed that Malaysia's high number of annual public holidays meant that Malaysians were enjoying more pay "for less work".

“The West has been overpaying their people. This is what happens when wages and compensations for work are not accompanied by increases in productivity. I fear Malaysia may be heading this way if we pay more for less work, as we are doing now,” he wrote in his blog.

Rebuffing Mahathir’s 'fear', Rosli said it was the government’s lavish expenditure which would accelerate Malaysia's road to bankruptcy and which could make the country go the path of Greece.

“Our government spends too lavishly that our debt grows annually," Rosli told Harakahdaily. "For more than 10 years our budget has been in deficit. This continuous deficit will bankrupt the country."

In its alternative budget, Pakatan Rakyat has pledged to implement the minimum wage policy, receiving support from workers and civil service unions.

The amount proposed is a minimum wage of about RM1,500 in line with pay rise across the region. Some 30 percent of the country’s workforce earn below RM900, making them the main beneficiaries of a minimum wage policy.

Rosli however said that any pay hike must not exceed the level of workers’ productivity as it would put employers at the losing end.

“The minimum wage policy must take into account the productivity and is the best remedy to heal the relationship between employees and employers, where both partake the fruits of higher productivity,” he stressed.

-Harakahdaily