RM900 has less ‘buying power’ than in 1997

The new minimum wage policy at RM900 for workers in Peninsular Malaysia and RM800 in Sabah and Sarawak is an insult to the worker.

COMMENT

On Jan 1, 2013, the minimum wage policy came into effect. It’s still a contensious issue although the Human Resources Minister says less than 700 employers had requested for deferments.

Truth is the new minimum wage policy at RM900 for workers in Peninsular Malaysia and RM800 for those in Sabah and Sarawak is an insult to the worker.

The Malaysian worker has not recovered since the 1997 Asian financial crisis. Had he recovered, his wages could have grown in terms of ringgit received.

Today if you equate his earnings with its buying power, the Malaysian worker is earning far less than he did pre-1997.

As such, the new minimum wage at RM900 for workers in Peninsular Malaysia and RM800 in Sabah and Sarawak is meaningless.

Take a look at the increases in the prices of houses, rice, petrol, sugar, education, toll and interest rates for loans. See how poor this worker has become.

Thus the RM900 a month is an insult to the worker.

The RM900 proposal was actually mooted by the Malaysian Trade Union Congress (MTUC) prior to 1997. In fact in 1992, MTUC was seeking minimum salary to be fixed at RM1,200 but had indicated it would settle for RM900.

But the government led by Dr Mahathir Mohamad would not have it.

To do so would attract too many Malaysians to factories and that would put a dent to the influx of foreign labour which had become a good source of income for many government officials, including some ministers at that time.

The Human Resources Ministry was then propagating a performance-driven wage system, but that too did not work out when it brought in cheap foreign labour. These workers were also grossly exploited, thus lowering wages.

So MTUC’s rightful request for better wages was stamped out.

Corruption negates productivity

Now the government is using this lowered wage as the benchmark in industry to tell the Malaysian worker who had reached peak productive performance, to improve his performance; what an extremely wicked scheme.

Once the human effort has been exploited to its maximum, productivity increase can only come about with the introduction of more modern methods and that is the domain of management.

Yet take a look at the wage disparity between the workforce and the management which is unable to provide this advantage to the worker who has already peaked.

We still tap rubber the same way HN Ridley did when he first brought rubber to this country and even if there had been any improvement, it is totally insignificant. We harvest oil palm fruits the way it was done in the early 1950s, and what has this government done to improve that?

History notes that the Malaysian worker is the most productive in the world and yet today the wages that the Malaysian worker receive is no reflection of his/her productive efforts.

This is because any fool will tell you that when you have rampant corruption in a country, no matter how hard and skilfull the best workers produce goods of high quality and at the lowest cost, the result of their efforts will remain unproductive.

In short, corruption negates productivity.

The country which once had the most productive workforce now suffers because we are fast becoming a rogue nation, with huge surplus of corrupt government ministers and officials.

Back in the 1970s right to the early 1980s, the Malaysian workers were paid more than their Korean counterparts and more than the Taiwanese. In the early to mid-1960s, we were paid more than the Singaporeans.

So what happened? Why is it today our salaries are lagging far behind the workers in these countries?

No one seems to ask and no one seems to even worry except the Malaysian worker who has to live with a meagre RM900.

Mahathir afraid

In 1997, the exchange rate of the ringgit to the American dollar was one US dollar to about RM2.90; with the 1997 crisis, it went to one US dollar to RM3.50, and in that one episode alone the Malaysian worker had his salary slashed by a hefty 20%.

This was something the worker had not really realised and neither did Mahathir, the then prime minister, reveal to the Malaysian worker.

This is because even as Mahathir blamed George Soros for the currency crisis, Soros was doing a good job exposing Mahathir. Mahathir was afraid of being exposed to an angry Malaysian workforce.

Now Malaysian productivity is low, so low because Malaysians just do not have the motivation anymore to work. And all this is a direct result of the policies of the Barisan Nasional government.

The more you make, the more they (BN government) take.

Toffee Rozario is a businessman who spends his free time writing to create awareness. He blogs at Toffee’sTurn.