KUALA LUMPUR – Malaysian businesses must attract high quality investment to create new high-skilled jobs so that they can sustain minimum wages for their employees, said Bank Negara Malaysia (BNM) Deputy Governor Datuk Abdul Rasheed Ghaffour.
He said that Malaysian workers have lower bargaining power and due to that, they are being paid lower despite productivity gains.
“The minimum wage is an important policy that serves to ensure workers can afford necessities in the country, hence we need to shift towards raising income in a sustainable manner that requires structural reforms to be in place,” he said at the 2022 BNM Governor’s Address and Panel Discussion Webinar recently.
According to Abdul Rasheed, wages in Malaysia maintained at a rate below actual productive worth while employees tend to get a lower share of the national income.
“Therefore, improvements in labour markets are expected to support household spending with continued improvement in both employment and income growth,” the deputy governor said.
He added that there is a need to establish a multi-tiered levy as a market-based tool to reduce reliance on low-cost foreign workers.
Aside from that, he said enhancing active labour market policies (ALMPs) is crucial to ensuring that wage improvements are sustainable.
Speaking on the same issue, Socio Economic Research Centre’s executive director Lee Heng Guie is calling for the government to work together with the industries to address the issues coming up from the steep increase of minimum wage especially before it is implemented.
“We need to really consider that the world is in the post-pandemic phase and the recovery is still very uneven. Not all sectors are recovering at the same speed with various challenges coming in,” he said.
Earlier this month, Prime Minister Datuk Seri Ismail Sabri Yaakob announced that the government had agreed to increase the minimum wage to RM1,500 and this would be implemented nationwide for certain companies effective May 1, 2022.
The last time the minimum monthly wage was increased was on Feb 1, 2020, when it went up by RM100 to RM1,200.
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