Minimum wage: Mahathir defends wage hike increase

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Photo: YouTube screengrab

Prime Minister Mahathir Mohammad of Malaysia has come out in defense of the uniformed minimum wage increase to RM 1,050 from first January 2019 throughout the country amidst criticism and objections from trade unions, opposition and even leaders within his own coalition government.

Following recommendations by the National Wage Consultative Council (MPGN), cabinet approved the proposal to raise the minimum wage by RM 50 making it RM 1,050.This change will apply to the entire country, including Sabah and Sarawak. The new ruling will take effect in January 2019.

In the past, minimum wage was different on the peninsula than the one in Sabah and Sarawak.Workers in East Malaysia were only paid RM 920 compared to their counterparts in the peninsula.

In the same statement issued by the Prime Minister’s Office, employers would not be granted any subsidies for their workers’ wage increase due to the government’s current financial burdens.

Mahathir defended his cabinet’s move on the said wage increase, saying Malaysia certainly could not afford a raise beyond the one that was tabled in parliament.In his trademark, scathing remarks while speaking to reporters, Mahathir lambasted the previous Najib-led Barisan Nasional controlled government of leaving the newly elected Pakatan Harapan coalition government with a national debt of RM one trillion.

The hike in wages will affect employers, especially those that own small and medium enterprises (SME). They are at risk of incurring higher operational costs or even closure of their businesses should minimum wage be revised too drastically and too soon.

Further, the Prime Minister is very concerned about the impact of the changes in the wage change to the country’s competitiveness. He is well aware of employers and industrues’ preference for cheaper, foregn labour force. For this reason, Malaysia must maintain its ability to compete.

It should be noted that in their election campaign, the Pakatan Harapan coalition had pledged to improve the standard of living of its citizens, and minimum wage of RM 1,500 was among the main changes highlighted. However that figure would only be applied within the administration’s first term in power. In their more short term, 100 days’ 10 promises pledge, Pakatan Harapan declared it was commited to levelling minimum wage in the country and to formally begin the process of raising it.

On the other side of the argument, MTUC (Malaysia Trade Union Congress) labelled the RM 50 raise “beggarly“. In its official statement, the trade union scoffed at the government’s sincerity over the plight of workers in the country and branded the move “corporate exploitation through the government”.

Khairy Jamaluddin, an opposition member of parliament from the Barisan Nasional coslition, lamented that minimum wage benefitted employers, not the workers.

Even Charles Santiago, a member of parliament for Klang from Pakatan Harapan’s own fold openly asked the cabinet to review its decision as he believed that RM 50 increase did not address workers’ daily burdens of increasing costs of living.This was a departure of his support towards his own government but it was not surprising as he had always been very concerned about workers’ welfare.
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Minimum wage continues to plague national issues in Malaysia as it has never been truly and thoroughly acknowledged by the government before this change in government.Escalating prices of daily essential goods and the fact that only about 10% of workers nationwide are union members makes the issue rather challenging to be resolved.

The government hoped that although minimum wage has been set, employers would exercise their own discretion and consideration to further add to their workers’ wages. This was already in practice for those who are involved in the plantation industry where workers enjoy a higher salary of RM 1,200 to RM 1,350 for a combination of basic salary and allowances.