Friday, October 31, 2008

Consider Proposal For Minimum Wage

I applaud the decision by the Human Resources Ministry to establish a wage council to look into low salaries in certain sectors, particularly the electronic and textile sectors (The Star, Oct 8).

Although this is overdue and may be inopportune at this time in point as the world is facing an economic crisis, the effort is praiseworthy.

The proposed council should conduct an in-depth enquiry with the stakeholders, namely the MTUC and the employers' associations, on the issue.

Wage levels are still low in Malaysia in certain sectors. If one looks at EPF’s 2007 Annual Report, almost 75% of EPF active members have low savings.

A reasonable wage level has a positive effect on an employee's retirement savings. In this respect, MTUC's proposal of setting the minimum wage at RM900 should be given due consideration by the Government.

A reasonable level of basic salary will help members to accumulate sufficient savings for retirement as EPF contribution is based on worker's basic salary, excluding overtime payment, which does not attract EPF contributions.

Although wage determination is productivity-based, it also has a human rights dimension which warrants the attention of policy makers.

Our workers must be paid a decent basic salary. Private sector workers do not have lifelong pension to see them through their retirement years.


Taken from The Star Online, October 10, 2008.


Setting the minimum wage at RM900 in Malaysia will not solve the wages issue once and for all. An engineer with 1 year experience in areas other than Kuala Lumpur should be getting at least RM9,000 per month where 1 Euro equals to RM4.50. A production operator in areas like Seremban and Ipoh should be getting at least RM2,300 per month (without overtime pay). The appropriate base salary for a new technician in the same towns is about RM4,000.

Raising the workers' salary is the only way to boost the economy.

The investors will find it very difficult to relocate to other countries when workers in the rest of the South East Asian countries are also getting similar pay.

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