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Currently, over two million workers get paid less than RM2,000. Intermediate salaries in nine states do not exceed RM2,000.
Malaysia's National Economic Action Council (Majlis Tindakan Ekonomi Negara, or MTEN) has approved the presentation of a Progressive Salary Policy paper, as proposed by Minister of Economy Mohd Rafizi Ramli on Monday (7 August 2023).
The Minister's proposal follows the launch of the inaugural Employee Wages Statistics (Formal Sector) Report for Q1 2023, which revealed "low and slow wages" that he said the government needed to tackle immediately.
With the proposal accepted, a whitepaper on this will soon be presented in a special Parliamentary sitting in September, the Minister shared.
The Progressive Salary Policy will be a labour market policy aimed at systematically raising workers' wages. It will go hand-in-hand with the growth of the world economy, including the wage rate of workers in all sectors. According to Minister Rafizi, the policy is voluntary, incentive-based, and productivity-linked.
As cited by MalayMail, Prime Minister Anwar Ibrahim, who chaired the MTEN meeting, said Putrajaya is aiming to increase the percentage of workers' income, i.e., the wage share ratio to 45%, 12% higher than what was recorded last year (32.4%). In that vein, he said a Progressive Wage Model will complement the existing Minimum Wage model, and "will be followed through with annual progressive wage guidelines" for individual sectors, jobs, and levels, MalayMail reported.
Currently, over two million workers get paid less than RM2,000, he pointed out. Intermediate salaries in nine states do not exceed RM2,000. As Minister Rafizi hopes, the Progressive Salary Policy can help "take the first step to reform the salary structure of the people that will improve the lives of the Malaysian citizens".
Zahid Hamidi, Deputy Prime Minister of Malaysia, added his views: "I also see that this Progressive Salary Policy can help balance between rising wages and the cost of living for citizens in the city and rural areas. By weighing income and expenses, indirectly can handle rising inflation."
As found in engagement sessions and preliminary surveys, as many as 62% of employees and 80% of companies welcome progressive pay policy proposals, PM Anwar was cited as saying.
Lead image: Zahid Hamidi, Deputy Prime Minister of Malaysia Facebook
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