Paltry minimum wage hike leaves workers stuck in low-middle income trap

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The Penang division of the Malaysian Trades Union Congress is at a loss over the prime minister’s defence of an immoral minimum wage increase of RM50. As we are given to understand, some of his arguments are as set out below and challenged by us.

Our questions are these:

How does government debt servicing and government expenditure affect the minimum wage in the private sector?

The reality: No impact because the minimum wage is only for private sector employees. As it is, civil servants are already paid a starting wage of about RM1200, a cost of living allowance of RM300, housing allowance, etc.

Given the fact such allowances are not paid or rarely paid in the private sector, it becomes more urgent for the government to improve the private sector minimum wage in a realistic manner.

How much of private sector wages does the goverment pay?

Reply: None

Loss of competiveness with other countries?

So is the Pakatan Harapan government saying that the Malaysian working population should continue to wallow in the low/middle income trap? Are we to continue to struggle in the face of the ever-increasing cost of living just so that we can remain competitive? Are the workers of the nation suppose to remain entrapped in hardship to ensure employers remain competitive in their business?

The issue of being competitive is an age-old contention against empowerment of civil society organisations especially the trade union movement.

But the facts indicate otherwise. South Korea and Singapore, as we understand, kick-started a wage empowerment policy that has resulted in those nations breaking out of the low/middle income trap. And these nations still remain competitive even though they have moved out of the low/middle income twlight zone!

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When the other emerging economies embarked on a policy of breaking the low/middle wage trap, we did otherwise. The result: an influx of millions of migrant workers, documented or otherwise, which inevitably continued to suppress wages. It was a race to the bottom of the pit.

Until and unless there is a political will to transform the living conditions of our working population, through affirmative intervention, the workers of the nation will continue to stay put in the low and middle segment of society.

The PH government is beholden to live up to its pledge to raise the national minimum wage to RM1500 without any further excuses.

K Veeriah is secretary of the Penang divisio of the Malaysian Trades Union Congress.

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Soakkoon Wong
13 Sep 2018 9.27am

It reminds me of what a portentous capitalist , Mr Birling, in JP Priestley’s play, “An Inspector Calls” said., “keep costs low and profits high”,

Joshua Lim
12 Sep 2018 7.19pm

Profit-sharing in the form of year-end bonus is the realistic solution.