Labour stakeholders: Implement minimum wage without exemptions

 

Malaysia’s new minimum wage must be implemented across all sectors without exemptions in order to achieve the desired high-income status by 2025 as set out by the 12th Malaysia Plan (12MP), say labour stakeholders.

Objections, calls for postponement or appeals for exemptions are merely to maintain cheap migrant labour, said Labour Law Reform Coalition chairperson N Gopal Kishnam.

Kishnam said addressing income disparity should be a priority especially when close to 600,000 middle-income households slid into the bottom 40 percent income category in 2020.

This he said had inflated the B40 to B60, which grew the income inequality.

“The government must look into ways to reverse the growing income inequality trend to achieve the goals set out in the 12MP.

“They want to achieve a gross national income of over RM57,000 per person by 2025 which is estimated to be a little over RM10,000 per household income.

“But if we sidestep government obligations like an increment in the base pay of the nation, it only reflects poorly on the government’s commitments toward the 12MP,” stressed Kishnam.

N Gopal Kishnam

The government’s efforts have not gone unnoticed as Kishnam said Malaysia has been struggling to close the income disparity for more than 40 years with very little progress because employers have always had their way.

Migrant workforce

Kishnam explained that the country’s economy was reliant on a migrant workforce which largely drew the minimum wage.

“This was a big factor in the insignificant growth of the nation’s base pay,” he said.

Referring to the recent uproar over the RM7,000 minimum household income required for families to qualify to hire Indonesian domestic workers, Kishnam said this was a clear indication that Malaysian wages were headed in a downward trend and further away from the 12MP goals.

It was reported that the Human Resources Minister M Saravanan had exempted farmers, the hotel and tourism sector and companies with less than five employees from implementing the RM1,500 minimum wage from May 1.

However, Kishnam lamented that the minister was not transparent with his exemptions which left a lot of room for interpretation as to exempted employers.

“These vague descriptions of who will be exempted leave a lot of room for interpretation,” said the National Union of Transport Equipment and Allied Workers in Malaysia general-secretary.

Informal sector doesn’t see any other wage hike

The National Association of Human Resources Malaysia president Zarina Ismail explained that the informal sector comprised workers whose wage increments depended solely on the minimum wage review every two years.

“Denying these categories of workers who form the lowest income earners their long-awaited increment, having recently depleted their retirement savings, was wicked.

“The minimum wage was not a living wage yet the government saw fit to discriminate against workers in the lowest income bracket by denying them an increment,” said Zarina who is also the director of a private employment agency registered with the ministry.

Zarina Ismail

She explained that workers in businesses with less than five employees, for example, were those who would never get bonuses or other perks.

“Yet the profit margin of their employers weighs heavier in government’s consideration.

“If employers are unwilling to share the wealth and the government is uninterested in addressing the disparities created by their weak track record, then Malaysia will be hurtling in the opposite direction of the 12MP goals.

“The government has a chance to reverse the growing trend of income disparity yet chooses to look the other way, especially for workers who need it the most,” she lamented.

Unwilling to fully implement

Zarina pointed out that the 12MP targeted a monthly income for the B40 earners to reach RM4,200 by 2025 but the government was struggling to push the country’s base pay past RM1,500.

With three years to go before 2025, Zarina observed that the government was unwilling to fully implement even 35 percent of the wage it aimed to reach.

The next increment to the minimum wage was set to come into effect in 2024 and Zarina questioned if the government planned to implement a giant leap to RM2,100 which was 50 percent of the targeted wage of the B40 income bracket.

She explained that even if the government implemented a minimum wage of RM2,000 “we would only nearly be closing the current poverty line income of RM2,028”. - Mkini