Tuesday, October 29, 2019

Press Release - Minimum Wage vs. Living Wage

MTUC Penang Division wishes to record its appreciation to Dr. Yeah Kim Leng of Sunway university for his statement that, a minimum wage of RM1200.00 as announced in the 2020 budget, was inadequate for an individual working in the Klang valley. We also appauld his views that a living wage i.e. sufficient income to meet the basic economic necessities of a worker as opposed to a minimum wage, be an appropriate measurement of wages.

(See FMT 28.10.2019)

We, in MTUC Penang Division had, as early as 8.12.2018, called upon the government to migrant from the minimum wage module to that of a living wage.

(See FMT 8.12.2018 "Have a living wage instead of minimum wage").

When we made that call, then, it was in the context of workers having to work excessive hours, including overtime (upto the legally permitted 104 hours a month!) work on rest days, public holidays and even taking on a second source of income to ensure sufficient earnings to meet the economic pressures of the ever escalting cost of living. Thus, we find it refreshing that our position, in the matter, has been vindicated from an economist consideration in the matter.

Though Dr. Yeah's point of reference was of an individual living, and working in the Klang valley, we are of the view the situation would be about the same outside the Klang valley as well. Cost, of basic essential goods and services  say, rice, cooking oil, petrol, gas, flour, fish, vegetable, lentils, electricity rates, toll etc etc being uniform throughout the country workers, by and large, wallow in the vicious low and middle income trap as a consequence of inequitable wages.

The fact, that, wage adjustments even by the Industrial Court, has been pegged to a distorted Consumer Price Index (CPI) inspite of the glaring mis-match to purchasing power parity, ought to hasten, in our view, a re-constituted approach to wage fixation in the country. We are convinced that the only progressive path is to embark on a living wage, as opposed to a minimum wage, policy.

In conclusion it is our view that, working excessive hours of work and seeking supplementary source of income, would, inevitably, result in the deterioation of workers' physical and mental health - an invisible loss of productivity and higher medical cost for employers and the nation which could be avoided by ensuring workers' a living wage.

Secretary MTUC Penang Division
016 4184520

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