Enact an annual wage adjustments law to move low wages upwards!

Unless employers are legally required to progressively raise wages annually, the working class will remain stuck in a low and middle-income wage trap

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When many people demand that they be allowed to withdraw funds from their Employees Provident Fund retirement savings, it suggests they are confronted with huge financial challenges.

This is understandable, given the rising cost of living and falling purchasing power of their wages.

When workers are cash-strapped to meet their financial obligations – whether it is for servicing household debt or putting food on the table – withdrawals from their EPF savings are their last resort – an act of desperation.

So how do we resolve this cycle of low incomes and high living costs that workers find themselves trapped in?

There must be a progressive transformation from the current grossly inadequate minimum wage system. The nation needs to move from a minimum wage system to a financially sustainable living wage system. That needs political will to accomplish.

Apart from the 7% of workers who are unionised and covered by collective agreements and the civil servants, the remaining 93% of our workers are at the mercy of their employers for any annual wage adjustments.

Where there are no annual wage adjustments or where such adjustments are not enough to cover rising living costs, the stagnation or decline in wages results in workers facing financial distress.

So the government needs to urgently enact an annual minimum wage adjustments law – preferably linked to movements in the cost of living and the country’s gross domestic product (GDP).

Unless employers are legally required to progressively raise wages annually, the working class will continue to wallow in a low and middle-income wage trap.

READ MORE:  Implement living wage for civil servants and raise pensions – Penang MTUC

In such a situation, workers will be forced to seek financial relief from whatever source available to them – even their rapidly depleting retirement savings!

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.
AGENDA RAKYAT - Lima perkara utama
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  5. Lawan rasuah dan kronisme
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K Veeriah, a longtime Aliran contributor, has been a trade union industrial relations officer, involved mainly in collective bargaining and handling trade disputes, since 1978. He has also served as secretary of the Penang division of the Malaysian Trades Union Congress since 1991, after stints on the MTUC's national executive committee and general council
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Paul lim
Paul lim
26 Feb 2023 4.38am

If Malaysia wants to enter the rangs of developed countries then no one should have to struggle to make ends meet. Cheap labour can no longer be the norm. Those living on the poverty line have a right to have their earning topped up to a living wage level whether as pensioners or working. Poverty in work is not acceptable. There should be indexation to meet inflation. It is not only the rich who have a right to a comfortable life but all. If there is need to tax the rich to give to the poor. Do it. There should not be fear that the rich will fleet the country with their wealth.