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The minimum wage farce

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There is a chance that the government may institute a minimum wage, says Rani Rasiah. But the catch is it is likely to be merely cosmetic, and not a minimum living wage.

The campaign for a minimum wage - Photo courtesy of interlocals.net

On 1 May 1996, JSML (Jawatankuasa Sokongan Masyarakat Ladang), the plantation workers coalition of the Jerit network launched the campaign for a minimum monthly wage for estate workers. It called for a total revamp of the highly exploitative colonial wage system which assigned estate workers a daily wage that was subject to market price, weather conditions and crop yield, all factors beyond the control of the worker.

Public support for the RM750 monthly wage demand grew as the campaign shone the spotlight on the scandalous contrast between the affluent yet rapacious plantation capitalists and the then 300,000 estate workers who lived in poverty and backwardness. What’s more, it was revealed that the largest shareholder in every major plantation company was the government itself in the guise of agencies such as Permodalan Nasional Berhad and Amanah Saham Nasional.

A 1,600-strong demonstration by estate workers outside parliament on 19 April 1999, managed to draw some responses from the government and related quarters. In June 1999, the MIC announced it was submitting a report to the cabinet asking for a monthly wage of RM900 to RM1,000 for plantation workers.

In March 2000, the Human Resources Minister, Fong Chan Onn, made a classic diversion when he announced that the government was getting experts from the University of Malaya to study the feasibility of monthly wages for the sector. That study, which was completed later in the same year, never saw the light of day, and anyone can guess why.

Subsequently, Dr Mahathir, the then Prime Minister, announced that the Cabinet had agreed to the monthly wage in principle, and on 7 February 2001, on the eve of a big demonstration planned by estate workers outside the industrial court, Fong announced the decision to pay oil palm workers a minimum monthly wage of the princely amount of RM325!

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It was an anti-climactic end to the farce staged by the government – but worse was to follow. The RM325 turned out to be a minimum wage guaranteed to workers who despite reporting for work every day regardless of weather conditions, still made less than that amount. It was not a monthly wage as announced by the government! To this day, oil palm workers continue to be daily paid, and bear all the risks of the industry.

Malaysian workers have been tricked in this way more than once by the government. In 1998, in a dialogue with the MTUC which was campaigning for a minimum wage of RM900 for industrial workers, Dr Mahathir remarked that a minimum wage of RM1,200 should be implemented to cater for the needs of a family of five. That generous statement remained just that but it kept workers on a high for a while before it was conveniently forgotten.

Against this background what hope is there that the current minimum wage acrobatics of the government will bear any fruit?

The issue has been in the news since the start of the year. The Human Resources Minister, Dr Subramaniam, announced that the minimum wage policy would be implemented by the middle of 2011. In mid-October, the minister reported that the Cabinet had approved the minimum wage policy “to be implemented through the National Wage Consultation Council”.

Also the government is seen to be trying very hard to coax employers to support the minimum wage. They are quoting statistics and offering arguments normally put forward by unions and other non-government organizations.

In August 2010 for example, the Human Resources Ministry revealed that the National Employment Return study of 2009 found that 34 per cent of the total workforce in the country earned less than RM700 a month, i.e. below the poverty line of RM720, and that a further 37 per cent earned between RM700 to RM1,500. Minister Subramaniam has argued that “salaries must commensurate with the increase in the price of goods and the higher standard of living”.

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All this looks very promising but given the track record of the government, there is much scepticism about their sincerity. The whole chain of events looks like the reenactment of an old script with a bit of recasting.

The government’s credibility has been further eroded by recent developments. They have demonstrated their utter impotence when engaging with the corporate chiefs. Remember how the federal government’s promise of a pay hike for security guards by 1 July 2010 was irreverently dismissed by the employers’ union, the Security Services Association of Malaysia? And how did the government respond? They retreated meekly, saying the issue needed further study!

More and more, it is becoming clear who is boss around here, and the Tenth Malaysia Plan testifies that that exactly is what the government desires. Less government intervention, greater ease of doing business, a more business-friendly environment, the private sector as the engine of growth – the neo-liberal mantra is all-pervasive in the plan.

The Malaysian Employers Federation has shown itself to be intransigent on this issue. One of its representatives has been quoted as saying, “… even if the world is to come to an end, and we are born again, MEF will still strongly oppose a minimum wage”. Denying workers their rightful wages seems to be a matter of principle for the MEF! It even fails to see what is after all current capitalist prescription: that higher wages for workers will translate into a boost in buying power from which employers will benefit. In fact, the global economic realities of today have prodded heavily export-dependent economies to make fundamental shifts in policy by laying greater emphasis on domestic demand. In China for example, workers’ wages have been revised upwards in order to stimulate domestic demand to counter the likelihood of a decline in exports.

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Under these circumstances, how is one to view all this suspenseful sound and fury on the part of the government on the issue of a minimum wage? What is certain is that it is likely to drag on over a period of time, and if elections are on the cards, it will be used to win votes. And after that, it will be forgotten again.

However, there is a chance though that this time the minimum wage will materialise. The pressure is great. We are reminded by even establishment types that 90 per cent of countries have a minimum wage and Malaysia is not one of them. Also the NEM (New Economic Model) vision of moving from a middle-income to a high-income country sounds rather obscene if it is to be on the backs of low- and poverty-line income workers.

Indeed the NEAC (National Economic Advisory Council) on the NEM has cautioned that the reality of 40 per cent of Malaysian households living on an income below RM1,500 is untenable and can result in social and political instability.

Apart from these, the liberalisation measures initiated by the government this year in the form of the Goods and Services Tax and the withdrawal of subsidies promise to further impoverish the working class. These, along with proposed labour law amendments which threaten job security, are hugely unpopular with the people, and the government has been forced to step back a little and do a rethink.

There is thus a chance that the government may institute a minimum wage. But the catch is it is likely to be merely cosmetic, and not a minimum living wage. As in the case of the plantation workers wage issue, it is bound to be a let-down, with the minimum wage fixed at some ridiculously low figure below the poverty line.

Aliran member Rani Rasiah is coordinator of the Oppressed People’s Network (Jerit)

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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21 Nov 2010 12.20am

Try a MAXIMUM wage as well. All bonuses in public sector and GLCs should be with-held so long as a nation is in debt. This would ensure that companies like MAS or Proton which are losing money will have no right to give bonuses to executives which can run into the millions individually or billions collectively regardless whether the company makes money or not. Maximum wage will LOWER SALARIES of executives and management in GLC or public listed companies which are losing money thus protecting the stockholders. It is up to the politicians to write into law this wealth distributive and protective measure to ensure people do not take billions in wealth and migrate to tax havens as is being done throughout the west in collusion with coutries inconsiderately taking unethical money… and killing local economies… Maximum Wage is the right minded version of VAT and GST. The way forward to world development and mankind’s future is equitable wealth distribution, and prevention of sequestration of wealth via prevention of plutocracy. ***Maximum Wage*** in conjunction with ***Socialist Asset Limits*** will be the buzzword of the world economy’s… Read more »

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