Malaysia plans new wage scheme for low-income workers
The Malaysian government will introduce a new programme to raise wages for low-income workers as the Southeast Asian country is grappling with rising living costs and growing inequality.
Economy Minister Rafizi Ramli (Photo: thestar.com.my)
Kuala Lumpur (VNA) – The Malaysian government will introduce a newprogramme to raise wages for low-income workers as the Southeast Asian countryis grappling with rising living costs and growing inequality.
The Progressive Wage Policy, under whichemployers would gradually increase pay for their workers based on their skills,experience and performance, will start in June 2024 and involve 1,000 companiesin a pilot project.
Economy Minister Rafizi Ramli said that the Malaysian Government will spend 2billion RM (430 million USD) for the new policy, which is expected to benefit1.05 million workers.
Unveiling the plan last week, he told the parliament that Malaysia's salarystatistics showed 47% of the country's workers earned less than the povertyline of 2,589 RM (550 USD) a month in the first quarter of 2023.
He said low wages have seriousimplications for the livelihoods of workers in the country, with a majorportion of their salary spent on basic needs and little savings
The wage policy, which is targeted at the small and midsize businessesthat account for the vast majority of Malaysia's workforce, will be implementedin stages and is meant to complement the existing minimum wage policy.
Malaysia introduced the minimum wage in 2012and has since increased the floor on pay for workers in the lowest category.The current minimum wage is 1,500 RM per month. But Rafizi said the policy hasalso led to wage compression over the years, causing pay among skilled andsemi-skilled workers to stagnate.
The World Bank's Malaysia Economic Monitorreport in October pointed out that the wage gap between low-skill andhigh-skill workers has widened over time, rising 37.4% from a gap of 1,800 RM permonth in 2010 to 2,474 RM in 2021. Annual real wage growth in Malaysia between2011 and 2021 was 2.4%, compared with 3.1% in Thailand and 4.0% in Vietnam./.
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Economy Minister Rafizi Ramli (Photo: thestar.com.my) 
