MTUC: Budget handouts are paltry, reform wages best way forward

 

The Malaysian Trades Union Congress (MTUC) and its Penang division have spoken out about the need to address the fundamental issue of low wages in Malaysia.

Penang MTUC secretary K Veeriah said the recent Budget 2023 announcements do not go far enough to address the core issues of the rising cost of living and declining purchasing power.

He said initiatives announced by the government such as a reduction in income tax and an allocation of RM500 for individuals with less than RM10,000 in their EPF accounts were insufficient.

“All the announcements have to be tested in their implementation.

“The culture of insignificant one-off handouts seems to be preferred as opposed to a holistic approach to rectifying the fundamental issue - low wages,” Veeriah said to Malaysiakini.

He gave the example of how only seven percent of workers in Malaysia are unionised and can use collective action to bargain for wage increases.

However, he said, the rest have to rely on their employers for the same.

He added that during the pandemic, wage freezes and cuts were the norm for many, leading to stagnating or declining wages and a reduction in monthly EPF contributions.

To address these issues, Veeriah called for the government to migrate to a living wage model, as recommended by a 2018 Bank Negara Malaysia study.

“They must migrate to a living model of wage as opposed to the current minimum wage. In fact, a 2018 study by Bank Negara Malaysia recommended that the country moves towards a living wage that ought to be RM2,700 per month for a single adult.

“In the circumstances, there can be no challenge that our workers are paid a pittance and, therefore, the government has a moral debt to at least progressively migrate to a living wage - enough disposal income to meet the basic necessities,” he stressed.

Veeriah also argued that the government should make it mandatory for employers to adjust wages annually based on changes in the cost of living and GDP.

He further noted that the recent reduction in income tax for the middle 40 percent of income earners (M40) is insufficient to address the financial constraints faced by many middle-income earners.

“The M40 population make up the largest segment of income taxpayers and a two percent reduction is nothing much to celebrate.

“It would translate to a one-off saving which does not address the challenges of day-to-day financial constraints on account of an inadequate middle-income wage trap,” he said.

Similarly, Veeriah said the one-off RM500 allocation for EPF contributors with less than RM10,000 in their accounts was also inadequate to address their grossly depleted savings.

National salary reform

MTUC secretary-general Kamarul Baharin Mansor lauded the government for acknowledging the issues of low wages and job mismatch faced by local workers, particularly in the 3D (dirty, difficult, and dangerous) industries.

He said, in response, the MTUC proposed a comprehensive national salary reform to raise salaries to a reasonable level and attract local workers to the 3D sector.

“The proposed salary scale should include starting salary, final salary, and annual increases based on academic qualifications, experience, and skills,” Kamarul said.

MTUC also urged the government to review the pay of individuals in the top management of companies and statutory bodies, saying some of their monthly salaries reach RM100,000 a month.

The significant difference in salary between lower-level workers and top management, up to 40 times, has resulted in the persistence of the “two-class society” in the modern world, Kamarul added. - Mkini