This article first appeared in Forum, The Edge Malaysia Weekly on February 13, 2023 - February 19, 2023

The period from the mid-1980s, when I started my career as a journalist, until 1996 was a time of tremendous economic growth for the nation. The strong growth started after a recession in 1985 that was caused by the collapse of the international commodities market and it lasted until the Asian financial crisis (AFC) struck in 1997.

During this time, one witnessed and, as a journalist, chronicled Malaysia’s economic growth at its fastest. The nation emerged from an agriculture and commodity-based economy that was dependent on import substitution and assembly-line activities, focused on a lower value-added chain of electronics and electrical products, into one that had the ambition of being a fully industrialised nation.

The idea was to move into heavy industries, putting more value into our raw commodities by going further downstream and climbing up the value chain of the manufacturing and electronic and electrical sectors (unfortunately, a target with which we are still grappling in 2023).

Initiating the Look East Policy, we based our industrial master plan on the South Korean model. We admired and tried to emulate their chaebols (conglomerates), attracted Japanese manufacturing firms looking for cheaper production centres here and adopted the sogoshosha (trading houses) route. In short, we dreamt of building our own Samsung, Sony or Mitsubishi. 

We studied the success of Taiwan’s small- and medium-scale industries too. More importantly, in order to move the economy forward and become successful, Malaysians had to match the work ethics of the Japanese, South Koreans and Taiwanese.

During this period, the country launched the national car project, Proton, and set up government-backed heavy industry companies to move into the steel, cement and engineering sectors. This period also coincided with the vast opening of our seas for multinationals to look for oil and gas resources, which supported the growth of local shipyards and fabrication facilities.

It was also a time when a lot of policy papers were presented on how Malaysia could become an industrialised and high-income nation. The Malaysian Institute of Economic Research (MIER) was at the forefront of many policy proposals and promoted the view that a modern and industrialised Malaysia would not be meaningful if the income of its workers did not rise accordingly.

One policy paper by MIER was on the Income Doubling Plan (IDP), which basically set out the track for the nation’s and workers’ income to double within a certain period of time.

It was a plan that struck a chord with the lowly paid junior journalists at Business Times (BT), then the country’s only business and financial daily. BT was part of the New Straits Times Press Bhd. As members of the National Union of Journalists (NUJ), our pay scheme at BT  was structured according to the collective agreement between the company and the NUJ.

So at that time, based on our employment grades, our annual increments were between RM50 and RM60. There were four steps in a grade, and that meant the increment after four years was only about RM200. Rarely, a journalist would get a two-step increment in a year. And once you reached the top of a particular grade, there was no guarantee that there would be an automatic promotion to the next grade. If you were “stuck” at a grade, it meant that there was no increment for a year or even more.

I remember it was in this scenario, and after the presentation of MIER’s IDP, that I struck up a conversation with fellow BT journalists Sharif Haron and Ahiruddin Attan (now better known as Rocky Bru) that we must do something to improve our own income.

“I am not going to wait for so long for our income to double as stipulated by MIER’s IDP. Why don’t we initiate our own income doubling plan?” I proposed.

So, we did just that, working harder and putting in longer hours, as NUJ members were entitled to claim overtime (OT) — two hours for a half-shift and four hours for a full shift. Depending on one’s grade, a full shift could earn you between RM40 and RM60 extra per day. 

By the nature of the job, where late assignments were frequent, it was normal for reporters at BT to have at least five shifts of OT a month. One could add more OT by volunteering to do early morning or late-night assignments — those outside your normal eight-hour shift. Then be prepared to get yourself recalled on your day off or work during public holidays, which normally meant you could get a double or triple shift allowance in a day.

Opting to cover outstation assignments (as BT only had a Kuala Lumpur office), when there were no takers for such assignments, would also mean additional income in the form of OT, lodging and transport allowances. Further income could be gained by writing for supplements or special focuses — which were aplenty at BT as it was a source of advertising revenue for the newspaper. One could get more money by becoming the editorial coordinator of the special focus.

Just by doing this, in certain months we could earn double our basic pay almost immediately, instead of waiting for the stipulated time frame set by MIER, which also depended on how strong economic growth was.

This brings me to the situation today where the average salary for Malaysian workers, including graduates, is low. Some say we are caught in the middle-income trap as the economic growth since the AFC has not been great and the plan to move to a higher value-added chain has not been successful. We are still an economy with a high proportion of low-end activities that depends a lot on foreign labour, including unskilled workers. Their presence indirectly pushes salaries down for many Malaysians.

The issues of inflation and the weaker ringgit, which partly cause the cost of living to rise, have further eroded the workers’ purchasing power as salaries remain relatively low for many. 

But getting out of the middle-income trap is not easy. This requires Malaysia to correct the structural problems facing the economy that have prevented it from moving up the manufacturing chain, and expand its knowledge and digital-based economy — which are crucial for achieving a high-income nation status. It takes political will and perhaps many years of planning and commitment to get the economy moving to a sustained high-growth path.

In the meantime, what we can do is continue to put more money into the pockets of workers. The government has been doing this through its various cash disbursement programmes. And if targeted subsidies, a measure which is long overdue, is implemented soon, notably on petrol, diesel and gas, this means more cash can be channelled to the lower- and middle-income group. The present blanket subsidy only benefits the rich most.

But putting more money in the pockets of workers should not be left to the government alone. Profitable companies, big and small, should do their part by taking less profit and spending more on their workers, notably the good ones.

At the moment, the national minimum wage is set at RM1,500 but in Kuala Lumpur, a decent living wage for a family according to Bank Negara Malaysia is between RM4,500 and RM6,000.

But since the opening of the economy post-Covid-19, and with the shortage of foreign workers, we have seen many local companies willing to pay more to get their business going. During a random check at shopping complexes, I saw a chain of kiosks selling telecommunication gadgets advertising for sales assistants (without experience) for a basic salary of RM2,000 (and this is not inclusive of the company’s Employees Provident Fund contribution and OT).

Crew for fast food outlets and restaurants — which now are starting to experience brisk business — are hiring, some for a basic of RM2,200, with one offering a package of RM3,000++. This is a good sign, as food operators and companies, facing difficulties in getting foreign workers, are willing to pay locals way beyond the minimum wage.

While this is encouraging, many graduates, notably fresh ones, are still poorly paid. This is partly because there is no minimum wage for graduates, not even for those supposed to be in high demand — those who study science, technology, engineering, and mathematics (STEM), finance and accounting.

Malaysia needs engineers, but according to the Board of Engineers Malaysia (BEM), the unattractive pay does not reflect that demand. In press reports late last year, it said that around 35% of starting salaries for junior engineers were below RM2,000! BEM recommended that the starting salary range for engineers be adjusted to between RM2,500 and RM3,500 per month. Honestly, for me, BEM should propose a minimum wage of RM3,500 for engineers. If a company requires an engineer, surely its operations are of higher value-added and not the backyard type.

Some government-linked companies which have programmes for fresh graduates are putting them into a one-year training stint with a salary range of RM1,800 to RM2,000. Without the guarantee of a permanent job, many opt not to finish their training stint. Like the poorly paid engineers, some prefer to be a crew member with a fast food operator or become a delivery rider that could give them more money, as they have commitments like study loans to pay. Parents, after putting them through university, do expect them to earn more as professionals.

While the government must steer the economy towards a high growth path that is sustainable, it will take time. With salaries for non-graduate jobs like fast food crew and riders getting higher, I do believe graduates who spend a minimum of four years studying a professional course should be paid better. Why not a minimum wage for them too?

If not, we risk losing those trained to be professionals to jobs that do not require their expertise and maybe worsen the brain drain to job markets like Singapore. In the long term, we would lose the workforce that is needed to power the economy towards a knowledge-based and high-income one.

Azam Aris is an editor emeritus at The Edge Malaysia

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