K Veeriah explores whether the nation should continue to enrich employers at the expense of workers.
The entire spectrum of economic activities, regardless of their scale of operations, is centred on the quest to maximise profits.
If there are entrepreneurs who say otherwise, they ought to be in one of two creeds – hypocrites or those who dole out a pittance of their profits under the guise of “corporate social responsibility” and, in the process, portray themselves as having contributed to society.
Such ‘returns to society’, by the way, is from the wealth they have amassed through the blood, sweat, tears and, sadly, sometimes, lives lost and bodies maimed in working for them.
The reality is no nation has ever achieved developed or developing status or otherwise without the sacrifices of the working class. But the irony remains that those who build the nation and enable their bosses to rake in profits continue to wallow in the depths of economic deprivation because of the inequitable distribution of the nation’s wealth.
Even today we are privy to reported cases of bonded labour akin to modern-day slavery!
The reported cases of migrant workers who work excessive hours, including the permitted 104 hours of monthly overtime and on rest days and public holidays, to pay off the debts they incurred in securing employment here is well documented. That was, and still is, the injustice exposed in the case of migrant workers toiling in the manufacturing sector.
And the circumstances may well be true in other areas of economic activity, including the small and medium-sized enterprises.
But are Malaysian workers better off than our migrant guest workers?
Sadly, Malaysian workers face the same predicament! Many need to take on supplementary jobs to sustain themselves because they receive inadequate wages, and that too after having clocked excessive overtime hours and working on their rest days and even public holidays.
A minimum monthly wage of RM1,100-RM1,200 would seem unfair compared to the living wage put forward by none other than Bank Negara.
According to its 2018 report, an individual living in the Klang Valley ought to be paid a living monthly pay of RM2,700. Couples with no children need RM4,500 whereas those with three children need RM6,500 per month.
Against the backdrop of this Bank Negara study, the minimum wage of RM1,200 ought to attract the argument that it is nothing less than treachery towards workers because of the inextricable intertwining of self-serving interests of both political and business bedfellows.
The cacophony of protest by employers to the Malaysian Trades Union Congress’ suggestions that the nation ought to migrate to a living wage model seems to have gained traction with the government. And the scorn heaped upon our workers, both by employers and political leaders, is that they shy away from the dirty and dangerous jobs and are not dependable.
Those arguments, in my opinion, are but a myth!
First, there are thousands of Malaysians working the such jobs overseas, including in Singapore. And what incentivises them to do so? Equitable wages!
A research paper “Impact of financial stress on employee productivity and behaviour” (Sabitha Marican, Roza Hazli Zakaria, University of Malaya), reported in volume 4, number 2, 2011 of the Malaysian Labour Review, has revealed a nexus between financial stress and negative consequences on workers’ health and job performance. One of the indicators used in the study to show financial stress was the household debt to gross domestic product (GDP) ratio.
Bank Negara’s 2019 report revealed that the ratio stood at a staggering 82.7%! The report said the “risk from household debt exposures remain concentrated among borrowers with monthly earnings of less than RM3,000”.
The Department of Statistics’ 2016 household income and basic amenities survey report said that, apart from Kuala Lumpur, Selangor and Putrajaya, the median income levels in all other states did not exceed the median income level for the middle 40% of households (M40 group). Imagine how much tougher it is for the bottom 40% of households.
So we can see that workers, Malaysians or otherwise, are facing financial stress which leaves them little choice but to work prolonged hours and take on other work to supplement their income so they can sustain themselves and their families.
The University of Malaya study also found that “failure to meet financial obligations is followed with adverse impact on physical well-being” and, if I may add, mental health as well. Such circumstances show us that workers’ wages are not enough to meet their financial obligations.
Crippling mental and physical conditions themselves in a lack of concentration at work and medical leave, which then affects productivity and raises medical expenditure.
So why lay the blame on overworked workers when the real solution lies in raising their wages? Equity and good conscience ought to prevail. People should remember the universally established principle of a fair living wage for eight hours of work. Anything short of that constitutes exploitation and could be equated to modern-day bonded labour!
According to Dr Fong Chan Onn, past professor of applied economics and dean of the Faculty of Economics at the University of Malaya, countries, such as Singapore, embarked on a high-wage policy by compelling companies to increase wages way back in the 1980s (The Sunday Star, 7 February 2010).
Today, those countries have raised their wages to commensurate with cost-of-living factors while our political leaders have pandered to employers in suppressing fair wages resulting in a “race to the bottom”! The profiteering economical gains arising from facilitating an influx of migrant workers, documented or otherwise, has only compounded the situation.
Fong’s article also highlighted the fact that our consumer price index (CPI) was grossly suppressed and, as such,Malaysian wages have been suppressed by market factor distortions for too long. Cumulatively, what this means is our CPI indices never truly reflected the real cost-of-living factors.
Sadly, our Industrial Court has, after the Malayan Commercial Banks Association v National Union of Bank Employees 1982 case, held fast to what is referred to as the unmitigated Harun J principle of pegging salary adjustments to two-thirds increase in the CPI.
This continues to intimidate the process of collective bargaining, affording employers a safe passage to deny workers a fair salary adjustment.
In this debate about the minimum wage versus a living wage, some have lost sight of the issue of disposal income. Disposable income, in simple terms, means income derived after statutory deductions such as contributions to Employees Provident Fund and Socso.
According to the Department of Statistics, disposable income in 2019 terms was 85.6%. Thus, for every ringgit earned, the worker has only about RM0.85 to spend on expenditure. By that calculation, the current minimum wage of RM1,200 translates to a disposable income of RM1,020 a month, giving rise to the argument of whether even the prevailing minimum wage is fair. And we haven’t even considered the depreciation of the ringgit!
Given that fewer than 6% of Malaysian workers are unionised, millions of them must be eking out a living in what is described as “precarious work” including those in the informal or ‘gig’ sector. The latter are the ones who fall through the cracks of social security protection such as the Social Security Act 1969 (Socso), the Employees Provident Fund, the Employment Act 1955 or even claims of unfair dismissal under Section 20(1) of the Industrial Relations Act 1967.
Thus, the question that needs a response is whether the government has the political will to:
- progress from a mismatched minimum wage system to a realistic living wage system to ensure workers break out from the vicious circle of the low and middle-income trap
- cover all working-class citizens under the social security safety nets to ensure they are not deprived of such protection
- recalibrate all existing labour legislation to confirm with internationally accepted labour standards
- ensure a vibrant workers’ movement that could endeavour to achieve a meaningful transformation of the socioeconomic landscape for the working-class citizens of the country
As they say, the gauntlet has been cast, and it is for the government of the day to take up the challenge.
K Veeriah is secretary of the Penang division of the Malaysian Trades Union Congress