Global capitalist system denies workers decent wages

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kumarFor how long do we have to keep our workers in poverty to enable us to compete for FDI? The international economic system mandates that we have to take part in a debilitating “race to the bottom” in our attempts to entice the all-important foreign investor. Do we accept all these unfair rules that mandate that we have to deny our workers a reasonable share of the wealth that they have helped create, asks Dr Jeyakumar Devaraj.


Recently, a group of about 100 people, members and supporters of MTUC, gathered in front of Parliament House to submit a letter to the Prime Minister requesting that an Act specifying RM900 per month as the minimum wage be passed in Parliament. This request is eminently reasonable as Malaysia is a wealthy country with a per capita income of RM23,000 per year, which works out to RM9,500 for a family of five, and this demand has been put forward by other workers’ groups such Jerit.

RM9,500 a month per family is a far cry from the RM500 a month (or less) that is received by about 25 per cent of the workers in this country. And we need to bear in mind that a family of five will today require at least RM2,000 per month to meet their basic needs, and even this with extreme fiscal “prudence”. (The official poverty line is an unrealistic RM691 per month for a family of five). Given these facts, the request from the workers of Malaysia for a minimum wage is very reasonable – why shouldn’t they, the prime creators of the wealth of this country, get a slightly better share of this wealth.

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The Barisan Nasional government has so far turned down requests for a minimum wage. The BN government argues that Malaysia cannot afford to implement a Minimum Wage Act at this point as it will stymie our attempts to compete for Foreign Direct Investment (FDI). FDI is seen by our economic planners as essential for the economic growth and well-being of our nation. From this flows the policy that we need to compete with the other nations in Asia which have a lower wage rate by keeping our own wages down.

The BN government does have a point. If we as a nation wish to partake in the global capitalist economy abiding by the laws that prioritise the needs and requirements of the largest corporations of the world, then yes, the government reasons for rejecting the MTUC’s (and Jerit’s) demand for a minimum wage is valid.

But do we agree? For how long do we have to keep our workers in poverty so as to be able to compete for FDI to fuel our economic growth? The international economic system mandates that we and other developing countries have to take part in a debilitating “race to the bottom” in our attempts to entice the all-important foreign investor to bestow their “favour” upon us. Do we accept these terms of engagement? Do we accept all these unfair rules that mandate that we have to deny our workers a reasonable share of the wealth that they have helped create? Are there alternatives?

The BN government, the administrator of the nation, should put this issue to the nation in a manner that the people can understand so that we can together debate the options that are open to us. We cannot blame the BN for the asymmetries inherent in the international economic order that systematically discriminates against the smaller developing nations. But we must hold the BN government responsible if the BN insists on denying our requests and continues pretending that it has the economic situation under control when the fact of the matter is that the largest capitalists have got us by the b_ _ _s.

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What can we do? Is there a way out? We believe there is, but the way out will require major changes in the way we order our economic affairs. For example, we might need to cut down on private transport which has a verocious appetite for foreign currency and places a heavy burden on our economy in favour of efficient public transport. Are we as a society prepared to make these changes? These are issues that we need to put to the people so that they can discuss these in some depth.

A better world is possible, but we need to think, discuss and take important decisions.

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