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Beyond RM1,700: The true price of Malaysia’s wage stagnation

As living costs soar, the minimum wage still falls short of a dignified life

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A Bank Negara Malaysia report in 2018 revealed that an individual needs a “living wage” of RM2,700 per month to survive in the Klang Valley.

Six years have passed since the report was published. It does not take rocket science to conclude that this figure now needs to be adjusted for inflation. In my view, the current inflation-adjusted figure ought to be at least about RM3,000.

Compare this inflation-adjusted figure of RM3,000 against the national minimum wage of RM1,500, to be raised to RM1,700 from 1 February 2025 (a puzzlingly later date).

That should make us wonder whether the working class are being conscripted into poverty – either by design or because of the government pandering to the interests of the economic elite, just to appease the employers’ lobby.

Given that the new minimum wage of RM1,700 is grossly undervalued compared to the present cost of living, workers are likely to continue working overtime, on rest days and even on public holidays (if such extra work is available).

Alternatively, they may resort to taking on additional part-time jobs to earn a sustainable income.

Working excessive hours appears to contribute to the global deaths of some 745,000 workers annually, according to a past World Health Organization (WHO)/International Labour Organization (ILO) study.

Is the recently reported death of a seemingly healthy Malaysian working long hours, juggling time between more than one job, just the tip of the iceberg in this equation?

It is undeniable that deteriorating mental health due to financial stress results in a lack of concentration at work, enforced medically approved leave of absence, and increased healthcare costs – which leads to lost productivity.

READ MORE:  'Madani' government must increase minimum wage

A growing link appears to exist between financial distress and workers’ mental health, including sudden death. In Japan, it is termed karoshi, translated to mean “overwork death”.

Given that the country’s compensation of employees (COE) share of gross domestic product (GDP) is only at 32.4% (in 2022), it is clear that wages need to be progressively raised if the nation is to attain its desired high-income status. This will provide workers with a living wage.

But given the unrealistic minimum wage of RM1,700 per month compared to even Bank Negara Malaysia suggested living wage of RM2,700 (in 2018) for an individual, it seems wishful to harbour hopes of becoming a high-income wage nation in the next decade.

So, the only way forward to ease, if not remove, the financial constraints confronting workers is to transform the prevailing wage ecosystem. Enforce an annual wage adjustment system to compel all employers to raise wages. Ensure that wages progress rather than stagnate, as is currently believed to be the case.

As a prominent businessman recently stated, ‘volunteerism’ does not resonate with employers. They need to be compelled to raise wages.

This will ensure that workers receive a fair living wage and free them from having to work long hours, juggling between jobs. Most importantly, it will relieve them of financial distress.

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.

AGENDA RAKYAT - Lima perkara utama
  1. Tegakkan maruah serta kualiti kehidupan rakyat
  2. Galakkan pembangunan saksama, lestari serta tangani krisis alam sekitar
  3. Raikan kerencaman dan keterangkuman
  4. Selamatkan demokrasi dan angkatkan keluhuran undang-undang
  5. Lawan rasuah dan kronisme
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K Veeriah
K Veeriah, a longtime Aliran contributor, has been a trade union industrial relations officer, involved mainly in collective bargaining and handling trade disputes, since 1978. He has also served as secretary of the Penang division of the Malaysian Trades Union Congress since 1991, after stints on the MTUC's national executive committee and general council
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Ranjan Paramalingam
Ranjan Paramalingam
27 Oct 2024 5.28pm

Incomes are low and prices are high in Malaysia. Even if incomes remain stagnant, some benefit can come from price reductions. Such reductions can be achieved if more is done to fight such evils as corruption and mismanagement which add to the cost of living, with the lower income groups suffering the most from the burden of such evils.

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