Wage hike for civil servants will spur private sector to follow suit, says expert

 

Economist Barjoyai Bardai said the current mandatory wage hike was about 5% and not all employers were implementing it.

KUALA LUMPUR: The salary increase of more than 13% for civil servants announced by Prime Minister Anwar Ibrahim today will spur many in the private sector to also raise their employees’ salaries, says an economist.

Barjoyai Bardai, from Malaysia University of Science and Technology (MUST), said the Prime Minister’s announcement coincided with the government’s introduction of the progressive wage policy expected to be announced soon.

“We are moving towards the implementation of the progressive wage system, which involves mandatory wage increase. The current mandatory wage hike is about 5% and not all employers are doing it.

“So with this announcement, it will indirectly put pressure on the private sector to also do the same. Because if they don’t follow suit, the possibility of losing their skilled workers is also high,” he told Bernama.

Barjoyai said although the increase in civil servants’ salaries would increase the national budget, the government’s move would provide a worthwhile return.

“To date, the government has spent over RM90 billion to pay civil servants’ salaries, and this announcement will increase that amount to over RM120 billion. However, I believe as long as it is supported by the productivity of civil servants, it is worthwhile.

“The government needs to introduce Artificial Intelligence (AI) applications in critical government sectors to enhance the overall performance of the public sector in Malaysia,” he said.

Meanwhile, political analyst G Manimaran said the government’s initiative was a good approach to adjusting civil servants’ salaries in the country based on the current cost of living.

“I see it as an important move to ensure that all civil servants are recognised in terms of their actual wages. I hope there will be many more constructive improvements introduced in the future, in line with the contributions made by civil servants to the country’s development.

“I also hope that in addition to salary increments, the government will focus on improving and renewing existing allowances such as housing, cost of living and others,” he said.

Manimaran also said that special allowances should be given to civil servants working in Kuala Lumpur and other major cities in Selangor, Johor Bahru, and Penang.

“This is because the cost of living in major cities is higher compared to rural areas,” he said. - FMT