When many people demand that they be allowed to withdraw funds from their Employees Provident Fund retirement savings, it suggests they are confronted with huge financial challenges.
This is understandable, given the rising cost of living and falling purchasing power of their wages.
When workers are cash-strapped to meet their financial obligations – whether it is for servicing household debt or putting food on the table – withdrawals from their EPF savings are their last resort – an act of desperation.
So how do we resolve this cycle of low incomes and high living costs that workers find themselves trapped in?
There must be a progressive transformation from the current grossly inadequate minimum wage system. The nation needs to move from a minimum wage system to a financially sustainable living wage system. That needs political will to accomplish.
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Apart from the 7% of workers who are unionised and covered by collective agreements and the civil servants, the remaining 93% of our workers are at the mercy of their employers for any annual wage adjustments.
Where there are no annual wage adjustments or where such adjustments are not enough to cover rising living costs, the stagnation or decline in wages results in workers facing financial distress.
So the government needs to urgently enact an annual minimum wage adjustments law – preferably linked to movements in the cost of living and the country’s gross domestic product (GDP).
Unless employers are legally required to progressively raise wages annually, the working class will continue to wallow in a low and middle-income wage trap.
In such a situation, workers will be forced to seek financial relief from whatever source available to them – even their rapidly depleting retirement savings!