Why minimum wage is crucial for Malaysians

By P Ramasamy

Minimum wage is simply regarded as a renumeration for workers by way of legislation that tries to meet their basic subsistence level in the cost of living.

However, given the escalating prices of goods and services, it is argued that minimum wage seldom provides a real solution for these workers and their families.

Minimum wage does not prevent employers, especially generous ones, from providing higher wages, or unions from negotiating with employers for better terms and conditions for workers. In countries with low levels of unionisation and government suppression of workers’ rights, minimum wage makes a difference in the lives of these workers.

In Malaysia, less than 10% of the workforce in the private sector is involved in organised trade unions. Over the years, with the government’s preference for in-house and company unions rather than national ones, the bargaining position of workers has been considerably reduced.

It is a universal dictum: in countries with high levels of unionisation, the income level of workers is far better than in countries where unionisation is frowned on, where legislation exists to muzzle workers’ rights, and where there is dire need for governmental interference in regulating wages in the private sector.

This is where the question of minimum wage comes in.

In countries where there are low skills and an overt preference for cheap and foreign labour, governments must take proactive steps in safeguarding the rights and welfare of workers in the private sector.

In Malaysia, given the low level of skills in the local workforce – a matter that has been neglected by our leaders for a long time – there is a tendency for them to compete on the same level of skills as foreign workers. But with many employers preferring foreign workers due to their docile and compliant nature, local workers are finding it difficult to compete.

Thus, given the nature of labour conditions in Malaysia, workers and those in trade unions more often than not look to the government not only to legislate a decent minimum wage, but also to allow favourable labour conditions for local workers.

This explains why the trade union centres in the country voted for Pakatan Harapan (PH) in the recent election, with the expectation that the new government would look into the plight of workers with the view of improving their situation. The very fact that PH included achieving a minimum wage of RM1,500 in its manifesto was based on this expectation.

However, the government’s recent announcement of RM1,050 as the minimum wage for all workers in the private sector has thrown into disarray all expectations and goodwill it received from workers. Unionists now say there is no real difference between the former regime and the present one as far as the welfare and well-being of workers is concerned.

The human resources ministry and the National Workers Consultative Council were unable to convince the government to introduce a minimum wage that was balanced and acceptable to the millions of workers in the country who have long been denied the right to collective bargaining and unionisation.

Since PH swept into power more than 100 days ago, the human resources ministry has not been prepared to look into broad policy matters determining labour conditions, or how the welfare of local workers can be improved with the gradual reduction of reliance on foreign workers.

Even if there are constant flip-flops on the matter of foreign workers, surely the ministry can provide some ideas on how to improve the level of unionisation, which could lead to the betterment of the wage conditions of the local labour force. This could also mitigate the non-performance nature of the minimum wage.

The talk about PH’s numerous manifesto promises being made in the anticipation of losing the general election will not endear the coalition to the people.

Whether or not victory was anticipated, Malaysians voted for PH out of a genuine desire for change and improvement in their lives. Whether PH’s victory was anticipated or not, whether it was something tongue-in-cheek, the fact that PH got the votes says much about the people’s desire for change.

The government might not have the funds, given the financial depredations under the previous government, but surely when it comes to the private sector it is left to employers to understand the plight of workers and engage them in the most beneficial way. It is not for the government to come in and protect employers by saying this or that to deny workers of their rightful share.

For years, employers in Malaysia have been arguing that whether or not to increase minimum wage should depend on the level of productivity. However, these days the question of productivity is cleverly avoided simply because the wages of workers have not kept pace with productivity.

In a world that is highly capitalist in nature, I don’t expect the government to be pro-workers or even neutral towards workers or unions. Despite over 60 years of political independence, and despite the herculean sacrifices of millions of workers, their contributions have seldom been acknowledged by way of better wages and living conditions.

The recent announcement of the minimum wage for the private sector says more about the apologetic nature of the PH government towards employers than anything else.

(P Ramasamy is Penang deputy chief minister II.)

This article was first published in freemalaysiatoday.com

Leave a Reply

Your email address will not be published. Required fields are marked *