Recently there have been reports that employers are unhappy with the recent increase in the minimum wage to RM 1,200 per month in 57 urban areas across the country.
Increasing the minimum wage to RM 1,500 per month (gradually over a 5-year period) is one of the promises in Pakatan Harapan’s manifesto. Claims that this move will only benefit foreign workers are untrue, there are many Malaysians that earn a minimum wage.
In fact, retaining the minimum wage at the current wage makes it unattractive for Malaysians, and contributes to the flow of our ringgit overseas by foreign workers.
Unlike many other economies, the ratio of corporate profit to GDP in Malaysia is still high. For every RM1 generated in 2016, 35.3 sen was paid to the employee and 59.5 sen went to corporate earnings, while 5 sen was given to the government in the form of taxes.
In the past few years, our economic growth was driven by consumer spending but this was largely funded by debt. Our total household debt has reached a staggering RM1.18 trillion at a rate of 82.2% of GDP.
We are past the days of economic growth being driven from low wages. If we are to evolve into a high-income nation, economic growth cannot only come from increased profit .
Increasing wages will increase productivity, and has a bigger multiplier effect on the country’s GDP. Workers earning minimum wages tend to spend most of their earnings that will benefit the economy as a whole.
NIK NAZMI NIK AHMAD
KEADILAN Chief Organising Secretary
KEADILAN Central Leadership Council Member
Setiawangsa Member of Parliament