The Labour Law Reform Coalition is shocked to learn from a “Madani economy” document that Malaysia’s labour income share has dropped to 32.4% in 2022, a sharp decrease from 35.2% in 2017 (Bank Negara Malaysia Annual Report 2018).
That means, the workers’ share of the economy after the pandemic has rolled back to the status in 2011.
Although the Covid pandemic has severely and negatively affected the jobs and incomes of Malaysian workers, the LLRC had highlighted before that a low unionisation rate and lack of appropriate bargaining mechanisms at workplaces during the pandemic would lead to wage cuts unilaterally imposed by employers.
In addition, the decrease in the labour income share is also attributed to the lack of a concrete roadmap under previous governments. The ambitious 48% target of labour income share stated in the “Shared Prosperity Vision 2030” has remained elusive – a casualty of the absence of a resolute roadmap and audacious strategy to guide the way. As a result, this target was doomed to fail.
The Madani (Civil Malaysia) government must learn from previous mistakes and create a concrete roadmap for achieving a 45% labour income share in the next 10 years. Among other measures, it should have a national action plan on trade union development as a step to strengthen trade union bargaining power, which will certainly lead to higher wages and benefits for workers in Malaysia.
Trade unions act as the voice of the workforce, campaigning for equal treatment, improved working conditions and greater remuneration. The efficacy of these unions, however, is strongly based on a supportive legislative framework and dedicated involvement by the government.
We urge the government to step up to the challenge and a course consistent with the Madani values of fairness, inclusion and social advancement. The Madani government has a chance to guide the country towards a future in which workers’ wages and benefits reflect the full value of their contributions. It is a vow to respect the economic ideals of equality and justice.
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N Gopal Kishnam and Irene Xavier are co-chairpersons of the Labour Law Reform Coalition