A Minimum Wage for Malaysia
Is Malaysian Government Aiming to Suppress Wages?
Labour activists are campaigning for a national minimum wage in Malaysia where salaries are far out of touch with cost of living. Here are the issues.
From time to time the Malaysian government is overcome with resentment towards the many thousands of migrant workers, mostly Indonesians, in their presence and resolves to expel them all, one way or another. A few weeks later, as the middle classes call out for affordable domestic help and the construction sites across the country are disturbed only by the occasional passing of tumbleweed, the policy is quietly reversed and the migrants return. Malaysia, in common with just about every other developed or developing country of the world, cannot survive without migrant workers. And if some of those workers are illegal or unregistered, then that probably benefits the economy even more. The presence of migrant workers, especially those willing to accept just about any wages no matter how low because of fear of attracting the attention of the authorities, keeps wages for the whole country suppressed. This benefits some and hurts others; it is reasonable to assume that the former are happy with the situation while the latter would like to change it.
So it is with Malaysia where wage rates have become almost completely decoupled from the cost of living. A recent salary increase for civil servants only just managed to bring them up above the designated poverty line. The going rate for work in most of the country ranges between 300-450 ringgits monthly while the cost of living rarely dips below 800 ringgits no matter where in this highly diverse country one might look. Now trade unionists are becoming unexpectedly and almost unprecedentedly bold in asking for a set minimum wage which would enable workers to live free from the fear of poverty. Government minister Fong Chan Onn, who represents human resources in the country, has argued that introducing a minimum wage at the suggested rate of 900 ringgits per month would be disastrous because it would mean that migrant workers would receive the same rate and this would lead to job losses, inflation and the disappearance of investment overseas. The minister has rather revealed the government’s thinking on this issue, which is to support the low-wage economy for the benefit of business owners. This is not something that the government has freely acknowledged before.
Quite what will happen next is not clear. The Malaysian government has ruled almost since independence with the benefit of the Internal Security Act as a means of suppressing any unwanted dissent and it would not be surprising if this came into play at some stage. However, the whole region is moving away slowly and painfully from the low cost export processing model of which the low wage mentality is a large part. Eventually Malaysia will follow.
