PETALING JAYA: It is timely for Malaysia to think about implementing progressive wages or living wages to compensate for the increasingly steep cost of living, says the Malaysian Trades Union Congress (MTUC).
Its president Mohd Effendy Abdul Ghani said this is in addition to fully implementing the minimum wage.
“This will ensure there will be no discrimination towards implementation of wages for employees. The implementation of cost of living allowance should also be considered among employees in the private sector to cover some of the cost for the short term,” he said in a statement in conjunction with Labour Day.
The progressive wage model helps to increase wages of workers through upgrading skills and improving productivity.
A living wage is defined as the minimum income necessary for a worker to meet their basic needs.
Effendy said the delay in the implementation of the minimum wage for small medium enterprises (SME) following the Covid-19 pandemic has positive and negative impacts on employers and employees.
For employers, he said this provides room to recover from the effects of the pandemic while faced with the challenges of retaining employees who are offered more attractive and competitive salaries as the cost of living increases.
As for the workers, the postponement adds burden to their livelihoods as they cope with the higher living cost, he added.
“This has an impact on the SME industry in maintaining their business due to competition and high employee ‘turnover’ in addition to the difficulty of finding workers.
“The government should review the suitability of the minimum wage implementation in ensuring that it is sufficient to meet the basic cost of living needs.
“It is also timely to review the need to implement progressive wages with a more suitable living wage to offset the current and future cost of living,” he said.
Effendy also said the issue of forced labour linked to foreign workers needs to be dealt with systematically and continuously.
“Based on the ‘Trafficking in Persons’ report, for the second year in a row, Malaysia ranks the lowest,” he said.
“Continued tough action is needed against traffickers and issuing more movement passes for victims identified in state-funded shelters.
“We hope the government’s action to amend the anti-trafficking law and Employment Act to include a wider definition of forced labour will help eliminate the issue.”
On the issue of mental health and burnout, Effendy said studies show it had an impact on the performance and productivity of employees at work.
“The issue of job mismatch can also contribute to mental health and burnout. Based on statistics, job mismatch has increased by more than 30% among local graduates.
“This needs to be dealt with immediately to prevent the migration of skilled workers abroad,” he said.
The Union Network International-Malaysia Labour Centre (Uni-MLC) is urging the Human Resources Ministry to develop a new labour policy that will meet the needs and challenges of the post-Covid-19 era.
Its president Datuk Mohamed Shafie BP Mammal said the ministry should hold a dialogue with all stakeholders to review the current policies and labour laws.
He also recommended several measures to help ensure the welfare of workers.
These include raising the employer’s EPF contribution rate from 13% to 20%, especially for employees with a salary of RM4,000 and below and reviewing the mandatory retirement age of 60.
“The Employment Act should be extended to workers in Sabah and Sarawak to guarantee workers’ rights and welfare.
“There should also be a mandatory policy to set up more nurseries or childcare centres at every workplace,” he said, while also urging employers to prioritise hiring local workers.
Separately, Consumers Association of Penang education officer NV Subbarow said rubber plantation workers should be honoured and respected on Labour Day as they are the backbone of the country’s economy.
“No other sector has contributed as much development to a country as rubber plantation workers.
“Many things we use come from rubber. We should give them credit for their work,” he said in a statement.
