Wednesday, November 19, 2014

MALAYSIA:::Employers obliged to train low-skilled workers after profiting from them, says MTUC

Trapped in a cycle of low wages and low education, the Malaysian workforce is poorly compensated compared with shareholders, making employers morally obligated to retrain and provide proper education for workers to upgrade themselves, a labour rights group has said.

Responding to a report by the Khazanah Research Institute, the Malaysian Trades Union Congress (MTUC) agreed with the report's finding that despite significant growth in productivity, wages were not rising in tandem, due in part to the lack of bargaining power of low-skilled labour and over-reliance on cheap labour as a competitive advantage.
MTUC secretary-general N. Gopal Krishnan said a worker who contributed to company productivity was entitled to a share of revenue just like anyone else in the organisation.
"It is a moral obligation for the employer then, to give proper education and training to his employees so that they can improve themselves," he told The Malaysian Insider.
"If an employer fails to do that, it is unfair because these companies are making revenue from them."
In the last 10 years, Gopal Krishnan said, productivity or the measure of revenue against expenses incurred increased by 6.7% but salaries had only increased by 2.1% in the same period.
The Khazanah report "The state of households" released on Monday said that the economy "rewarded shareholders better than workers – and that is after including CEO salaries as workers' salaries".
While there was no rule on the "right" share between labour and capital, it was "clear that our businessmen are better than others in getting a bigger share", it said.
The report said that salaries and wages in Malaysia were 32.9% of the country's gross domestic product.
Gopal Krishan also said the industrial court should also shoulder blame for stagnant wages.
Wage increase percentages are tied to the consumer price index (CPI) and Gopal Krishnan said that in industrial court decisions involving contractual agreements, salaries were only increased by about two-thirds of the CPI.
"This is a very small and insignificant increase to wages so that is why the court is partly responsible for this situation with low wages.”
The Khazanah report said Malaysia's largely uneducated workforce was one of the most important reasons for low wages and low household incomes.
This is supported by the fact that Malaysian employers generally hire low- to semi-skilled workers, who have at the most a secondary school education. 
"Our workforce matches this – the vast majority is not educated beyond Form 5," it said.
It said that one in six children did not reach Form 4 and out of those who do, the large majority do not pursue tertiary education.
"Out of the government school students who enrolled in SPM, 91% passed their SPM examinations, but only about 35% (30 out of every 84 students) of those who start Form 4 go on to post-secondary education," the report said.
In 2012, only 24% of the workforce had tertiary education. Of this, 10.4% held degrees, 3% only achieved the Sijil Tinggi Persekolahan Malaysia (STPM) or A-levels equivalent, 2.4% were certificate holders and 8.3% held diplomas.
Migrant labour also makes up a substantial part of the workforce, with 13.4% or 1.76 million legal foreign workers out of a 13.2 million workforce in 2013. – November 19, 2014.

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