Malaysian businesses are growing, but salaries are not

Malaysia’s local workforce might be one of the most talented in the world, but looks like employers in the country are not rewarding their staff in accordance to what they might deserve.

“Even when our productivity increases, wages do not increase in tandem,” stated Khazanah’s new report on the state of Malaysia’s workforce.

“As an economy, we reward shareholders better than workers – and that is after including CEO salaries as workers’ salaries.”

Citing data from various government sources and publications, the report concluded that even as productivity increases, the lack of bargaining power of low-skilled labour and businesses’ over-reliance on low cost as a competitive advantage leads to households earning less.

It added the lack of education of the overwhelming majority of Malaysia’s workforce was one of the most important causes of low wages in the country.

“In 2012, out of the 24% of the workforce with tertiary education, only 10.4% were degree holders.”

Only two of out 10 of the total Malaysian workforce were also cited in the study as having advanced educational levels.

The Khazanah Research Institute report also quoted 2013 Ministry of Education (MOE) findings, which showed that “one out of six children do not get to Form 4” and the large majority of those that do, do not make it past secondary school.

“Despite the high demand for graduates (as demonstrated by the higher salaries they get), a substantial proportion of graduates are unemployed. It would seem that there is a discrepancy between the skills they have and the skills employers desire.”

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