Malaysia moots voluntary progressive wages in labour reform
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MALAYSIAN Prime Minister Anwar Ibrahim said the government is considering a policy to raise salaries more rapidly in an effort to boost the labour market and shore up the dwindling share of wages in the economy.
The proposed progressive wage policy will be voluntary, incentive-based and productivity-linked, Anwar said in a statement on Monday after a National Economic Action Council meeting.
Malaysia’s average wage levels have remained low and stagnant, making the cost of living one of the most pressing issue for Anwar’s eight-month-old unity government.
About two million of the country’s 16.6 million workforce earn less than RM2,000 (S$589) a month, and most Malaysian laborers will only reach a maximum monthly salary of RM3,500 in their careers, Anwar said in the statement.
Initial engagement sessions have shown that 62 per cent of workers and 80 per cent of companies are in favour of the wage model, and the next step is to hold talks with industry players, businesses and workers, Anwar said. The proposal will then be brought to the cabinet for deliberation and to study the requirement to provide funds as incentives for its gradual implementation, he said.
Anwar said that the new model, which will have guidelines for annual salary revision “for every sector, every job, and every stage” is part of labour market reforms meant to help Malaysian workers deal with rising living costs.
Malaysian workers’ wage share ratio has dropped from 37.2 per cent in 2020 to 32.4 per cent last year. The government aims to lift the proportion to 45 per cent, according to the statement. BLOOMBERG
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