Malaysia Introduces Minimum Wage policy for Private Sector workers this May Day
According to most Malaysian news media, the Malaysian Government announed on May Day their first Minimum Wage Policy for private secotr workers.
Ref: http://thestar.com.my/news/story.asp?file=/2012/5/2/focus/11214363&sec=focus
Here is the quote according to The Star, a Malaysian newspaper:
WORKERS in Malaysia celebrate Labour Day knowing the minimum wage that will be paid to workers in the private sector - RM900 per month for employees in the peninsula and RM800 for those in Sabah, Sarawak and Labuan.
With some exceptions, this will kick in six months after the Minimum Wages Order is gazetted. Finally, Malaysia will have a minimum wage policy in place.
Minimum wages are part of the social protection system. They counter-balance some of the distortions in the labour market and help soften the blow felt by workers during an economic crisis.
Revealing details of the minimum wage on Monday, Prime Minister Datuk Seri Najib Tun Razak said it complements the National Transformation Policy that is meant to drive Malaysia towards becoming a high-income nation.
The caveat being that the government expects productivity to be increased.
My personal opinion on the matter; I have always supported a minimum wage policy because we saw time and time again from many countries that if we let market forces dictate minimum wages for private sector, there is a tendency for employers to not increase minimum wage even as inflation increases or underlying profitability of companies grow tremendously because it cuts into their profitability.
A the same time, the minimum wage policy also have to have some measure of flexibility and not be incredibly high because small and medium enterprises which constitutes majority of the economy of a nation usually cannot afford very high minimum wages either. The minimum wage has to take into account the financial strength of the economy and inflation/cost of living.
Still the very fact that Malaysia, which tends to be more socially conservative than Singapore or other Asian nations made this huge leap forward is certainly worth applauding. A wonder that Singapore is not even as socially progressive. Yes I will agree this lack of minimum wage policy will make Singapore a more attractive investment place now compared to Malaysia for foreign investments but still, our own people are suffering from higher costs of living and without a guarantee that they be paid wages that can allow them to eke out a living is not for the benefit of the whole either.
Ref: http://thestar.com.my/news/story.asp?file=/2012/5/2/focus/11214363&sec=focus
Here is the quote according to The Star, a Malaysian newspaper:
WORKERS in Malaysia celebrate Labour Day knowing the minimum wage that will be paid to workers in the private sector - RM900 per month for employees in the peninsula and RM800 for those in Sabah, Sarawak and Labuan.
With some exceptions, this will kick in six months after the Minimum Wages Order is gazetted. Finally, Malaysia will have a minimum wage policy in place.
Minimum wages are part of the social protection system. They counter-balance some of the distortions in the labour market and help soften the blow felt by workers during an economic crisis.
Revealing details of the minimum wage on Monday, Prime Minister Datuk Seri Najib Tun Razak said it complements the National Transformation Policy that is meant to drive Malaysia towards becoming a high-income nation.
The caveat being that the government expects productivity to be increased.
My personal opinion on the matter; I have always supported a minimum wage policy because we saw time and time again from many countries that if we let market forces dictate minimum wages for private sector, there is a tendency for employers to not increase minimum wage even as inflation increases or underlying profitability of companies grow tremendously because it cuts into their profitability.
A the same time, the minimum wage policy also have to have some measure of flexibility and not be incredibly high because small and medium enterprises which constitutes majority of the economy of a nation usually cannot afford very high minimum wages either. The minimum wage has to take into account the financial strength of the economy and inflation/cost of living.
Still the very fact that Malaysia, which tends to be more socially conservative than Singapore or other Asian nations made this huge leap forward is certainly worth applauding. A wonder that Singapore is not even as socially progressive. Yes I will agree this lack of minimum wage policy will make Singapore a more attractive investment place now compared to Malaysia for foreign investments but still, our own people are suffering from higher costs of living and without a guarantee that they be paid wages that can allow them to eke out a living is not for the benefit of the whole either.