Proposed minimum wage increase long overdue

This article first appeared in The Edge Financial Daily, on May 3, 2018.
Proposed minimum wage increase long overdue
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KUALA LUMPUR: The Malaysian Trades Union Congress (MTUC) said the proposed increase in the minimum wage announced by caretaker Prime Minister Datuk Seri Najib Razak is not a “gift” as a hike in the minimum wage has been long overdue.

MTUC secretary-general J Solomon said that it is also misleading for the caretaker government to announce this measure, as the minimum wage level is under the purview of the National Wage Consultative Council (NWCC).

He also noted Barisan Nasional’s (BN) plan to raise the minimum wage to RM1,500 over five years, as indicated in the coalition’s manifesto for the 14th general election (GE14), undermines the function of the NWCC and its technical committee.

“It is misleading for the caretaker prime minister to promise an increase of the minimum wage immediately if BN came to power, because whoever wins, the minimum wage is already due for revision in July and, therefore, it is not a ‘gift’,” said Solomon in a statement yesterday, adding that the MTUC had proposed a minimum wage level of RM1,800 for both Peninsular and Sabah, Sarawak and Labuan for the upcoming review in July.

He added that the caretaker government failed to revise the wages of the lowest income earners in the country which was due in January 2015, noting that there was an 18-month delay as the change only took effect in July 2016 with a small increase of RM100 in Peninsular and RM120 in Sabah, Sarawak and Labuan.

“The caretaker prime minister must take full responsibility of the delay as such [a] delay has shortchanged the private sector workers, particularly with the imposition of the 6% goods and services tax in 2015,” said Solomon.

Moreover, he noted that the current minimum wage of RM1,000 for Peninsular Malaysia and RM920 for Sabah, Sarawak and Labuan is also way below Bank Negara Malaysia’s suggested median income of RM2,700 for a single adult in Kuala Lumpur, as mentioned in its 2017 annual report.

The minimum wage was last increased by 11% and 15% in 2016, from the RM900 and RM800 previously set when the minimum wage Act came into effect in January 2013.

Currently, the minimum wage for Peninsular Malaysia stands at RM1,000 and Sabah, Sarawak and Labuan at RM920, after the 11% and 15% increase in the minimum wage level in 2017.

He said the five measures announced by Najib have been long overdue, adding that it is ethically and morally wrong if the measures were only implemented if BN wins, as this could be construed as bribery, in view of the upcoming GE14.

“It is not for the workers to be loyal to the government, but it is for the government to be loyal to the workers, who form the backbone of the developing nation.

“It is the social and moral obligation of a government to ensure the contribution of the 14 million private sector workers are duly recognised, with living wages and civil rights,” said Solomon.

Meanwhile, MTUC Sarawak secretary Andrew Lo said the hike in the minimum wage is welcomed but added that it must be recommended by the NWCC, based on sustainable economic policies and not solely on politics.

“It must be based on sustainable economic policy and labour market, not at the whims and fancies of politicians. Workers’ rights must not be hijacked by politics,” said Lo, who is also chief executive officer of the Sarawak Bank Employees’ Union.

On Tuesday, Najib announced five proposed measures at the 2018 Workers’ Day rally targeted at workers, which he said will be implemented if BN returns to power in GE14.

These measures include the immediate hike in the minimum wage in 2018, an additional RM60 million allocation for the Social Security Organisation — bringing the total allocation to RM182 million — and a RM3 million grant to be distributed by MTUC.

Najib also announced a RM200 million allocation for Human Resources Development Fund Bhd for human capital development and mandatory paternity leave of at least three days for private sector employees.