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Standardisation Of Minimum Wage Is Positive Move, Must Be Further Improved In The Future

The move by the Federal Government to standardise minimum wage across Malaysia, in line with the Pakatan Harapan manifesto, is commendable.

Even though the increase may be small for now, but this is real progress that we can build on in the foreseeable future.

Moreover, it is an undeniable fact that wages have stagnated in Malaysia, and our aspirations of becoming a high-income nation has been hampered by years of stagnation. We should also not only focus on per-capita income but also look at the inequality of wages between the rich and poor.

At the heart of our cost of living issue is low wages especially for the B40, and it is pertinent that we address this with a holistic solution.

As our economy recovers, we have to increase the minimum wage to RM1500 over five years in line with our manifesto and look into incentivising business-owners — including giving tax breaks — to raise the minimum wage, or go even higher to meet the living wage standard as suggested by Bank Negara.

The government procurement policy should be amended within a reasonable period so that companies giving living wages are given priority.

Its long-term impact will be an increase in incomes, which will lead to increases in expenditure and, more multiplier effects across the economy.

At the same time, the additional B40 incentive will also help make the so-called “3D” (i.e. dirty, dangerous and difficult)—such as construction and plantation—jobs more attractive to locals and reduce dependency on foreign labour. In fact, like other developed countries, this sectors can increase their productivity through automation. For so long, these sectors have been coddled by low wages for foreign workers.

The World Bank noted in a previous analysis that a 10 percent increase in immigration flows have reduced the wages of the least-educated Malaysians by 0.74 percent.

These are issues that we need to tackle, but of course let’s take it step by step. What we need now is the political will to do the right thing for all Malaysians.