Friday, November 6, 2015

MALAYSIA:::Minimum wage must meet living wage standards.

The Budget 2016 proposal for an increase in the minimum wage from RM900 to RM1,000 in Peninsular Malaysia and from RM800 to RM900 for Sabah and Sarawak has deservedly been roundly condemned for its inadequacy by the secretary-general of the Malaysian Trades Union Congress (MTUC), N. Gopal Kishnam.

The financial pressure on the lower-income group in particular has grown significantly since the introduction of the goods and services tax (GST). The MTUC had pointed out to the government that the GST will bring about unfavourable consequences to the workers of Malaysia, and yet the government proceeded with its implementation.
In the tabling of Budget 2016, it was evident that the GST has raked in the revenue necessary to dig the country's finances out of its morass.
The loss of confidence in the country's political system and its economic management is the main cause of Malaysia's economic predicament. While there are external global economic factors present as well, it cannot be denied that the internal considerations have weighed heavily on the depreciating ringgit and investor confidence.
The very fact that the GST is required for government revenue points towards the health of the country's economy – or the lack of it.
People, in particular the lower-income group, are impacted directly by the GST. The price of essentials has increased, and the sideshows engaged in by some ministers in trying to deny that, is a gross insult to all Malaysians.
With the increase in the cost-of-living caused by a policy decision, another policy decision which could alleviate the hardship caused by it has fallen short. This evidences a lack of will by the government to deal with the issues faced by the common people and in particular the lower-income group.
The moral imperative of a living wage
A living wage is the minimum income which is necessary for workers to meet their basic needs. Where that cannot be met through a basic wage, it tells on the failings of business and the economic system. It would seem that the right to profit supersedes the right of workers in earning a basic wage, and that it is not something which society should entertain.
Businesses, and organisations which represent the business community, have come out against the proposed minimum wage – stating among other things that the timing is not right. When is the timing right? Is it not apparent that the cost of living has increased significantly?

If the Malaysian economy and businesses have to rely on having workers earn wages which cannot equate to a living wage in order to keep unemployment levels low, it speaks of a failed economy.
Beware the East v West diversion
There is without doubt a lot of validity to the argument that the minimum wage in East Malaysia is inferior vis-à-vis West Malaysia – more so when the difference in cost-of-living is factored into the equation.
That though, should not be made to be the main issue as that is probably what the policy makers want. Where you have an issue of East v West, it detracts from the real issue – the inadequacy of the minimum wage as a whole.
Pressure Parliament
As the budget is being debated, the MTUC and other civil society organisations should pressure Parliament into enhancing the minimum wage.
For the voices of the people to be heard, there is a need for a renewed activist spirit.

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