KUALA LUMPUR (Dec 12): The notion that Malaysian youth are asking for unrealistic wages is a myth, says Khazanah Research Institute (KRI) visiting senior fellow Dr Lim Lin Lean.

According to its latest publication titled School-To-Work Transition of Young Malaysians released today, findings showed that many young people, particularly those in part-time and contributing family work, earn below their reservation wage (the wage below which youth would refuse a job offer) so as to have jobs.

"The minimum wage policy of RM1,100 per month starts in January next year, but maybe a question to consider is does this minimum wage apply to all sectors and all types of workers? (If not,) to which group should it apply to? Is it being used by employers to keep wages down?" Lim, who is the lead author of publication, told a press conference in conjunction with the release of the report today.

Lim said the Malaysian government should ask itself whether it should aim for a living wage policy instead of a minimum wage policy.

"Another question is really, should we be aiming for a minimum wage which is the basic level that keeps you above poverty, or should we be aiming for a living wage, which is a fair decent wage that is linked to an acceptable standard of living that goes beyond food accommodation and clothing and gives you access to some standard of living.

"Of course this would be adjusted to different areas, [for example] its clearly more expensive to live in Kuala Lumpur than it is in Sabah and Sarawak," she added.

Lim also noted that employers should not use affordability as an excuse not to consider living wages, instead of minimum wages. "It is too much of a blanket excuse," she said.

KRI executive committee chairman Hisham Hamdan pointed out, however, implementing living wage instead of minimum wage would pose a conundrum for corporates that are already grappling with declining profitability.

"The capital providers, the firms... they are not getting financial returns compared to the cost of capital, and we also have labour providers such as the youth not getting proper wages.

"So these are the issues which we need to solve moving forward, so it is going to be a big conundrum in how to improve the return on wages for the young people and at the same time provide a solution that is financially viable for the companies," he said.