KUALA LUMPUR (Aug 7): The government has set a wage share ratio of 45% of total income amid the low-wage issue in the country, according to Prime Minister Datuk Seri Anwar Ibrahim.
This is in view that the wage share ratio had declined from 37.2% in 2020 to 32.4% in 2022. However, no timeline has been set to achieve the target.
Over two million Malaysian workers still earn less than RM2,000 per month, based on statistics on wages in the formal sector for 1Q2023.
“This situation is particularly concerning for young people aged 20 to 24, whose median wage is only RM1,682 per month. For most Malaysian workers, their wages will only increase to RM3,500 at the highest level — around the age of 40 to 49 throughout their careers,” he said.
Meanwhile, Anwar noted that the proposed progressive wage policy (PWP), which complements the minimum wage policy (MWP), will be voluntary, incentive-based and linked to productivity.
In a statement after the National Economic Action Council (MTEN) meeting on Monday (Aug 7), Anwar said that PWP would serve as a shift towards restoring the labour market, so national wages could be increased more consistently with a more balanced wage distribution.
“The proposed policy model was developed after MTEN took into account the views and interests of employers and workers.
“This policy, which complements MWP, will be followed by annual guidelines for progressive wages for each sector, occupation and level,” he added.
According to Anwar, about 62% of workers and 80% of companies welcomed the proposed PWP during the initial engagement sessions and reviews. As such, MTEN hopes that this policy will receive the participation of as many companies and workers as possible.
"MTEN believes that PWP is one of the labour market reforms to ensure that Malaysian workers are not burdened with the cost of living and can enjoy dignified work with decent wages, for the well-being of the people and to achieve the agenda of lifting the country's economy," he noted.
Following the MTEN discussion on Monday, Anwar said that the proposed PWP will be brought to the next step, which is to engage in discussions and consultations with stakeholders, especially industry players, businesses and workers.
“This matter will be brought to the Cabinet to refine the implementation mechanism and explore the need to allocate funds as incentives for this policy, which will be determined based on the government's financial position and policy requirements,” he said.
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