THE 2016 Budget gave to the B40 group — those households with a monthly income of RM3,000 and less— a well-deserved leg up by increasing the minimum wage from RM900 to RM1,000 in the peninsula, and for those in Sabah and Sarawak, the current RM800 floor is being raised to RM920. For this act of social justice, that will end the callous exploitation of the country’s most vulnerable workers, the government is being roundly criticised by the Malaysian Employers Federation (MEF). Citing that it would cost private sector employers an additional RM3.6 billion annually, it sought to deprecate the move as benefitting over two million foreigners who will be repatriating their windfall. The inference is that this will do nothing for the country’s economy but increase the cost of production.
There are some three million workers who earn a minimum wage in the country meaning, therefore, that almost one million poor Malaysians will benefit, alleviating the living cost increase, which will then be ploughed back into the economy. To suggest then that these one million or so citizens can be ignored because guest workers, whose contribution to the country’s economy is no less valuable, are not deserving of being regarded with respect, is contemptible. The right to a living wage is nothing less than the right to a life with dignity in an employment environment where in-work benefits for low-income workers are few, if any. A criticism that treats imported labour as a commodity to be exploited with little mercy is embarrassing and blatantly cruel. The fact remains that they are needed.
And, to make matters worse, the need for cheap labour arises because cheapskate employers are not willing to spend money on upgrading technology to move away from labour intensive production. Simply put, these employers, in their unwillingness to modernise, are a drag on the country’s economy. If income repatriation is a problem, it is a problem caused by them and not the policy that seeks to deliver social justice, a function incumbent on democratic governments.
For, the minimum wage, which in Malaysia is supposed to be reviewed every two years, will end the inhumane act of holding the weakest in society to ransom by naked capitalism that seeks profit maximisation at any cost. It might just be the catalyst needed to modernise the manufacturing sector given the rise in labour cost, a much needed advance if the country is to escape the middle-income trap. Furthermore, capital-intensive production is not likely to displace Malaysian workers. If, as MEF claims, there are some three million employees drawing a minimum wage and of these, less than a million are Malaysians, substituting labour for technology will end dependence on imported, unskilled labour. MEF’s attitude to minimum wage — a mechanism intended to protect the interest of employees — is uncalled for. And that it is screaming blue murder testifies to the reality of the threat. Left without the protection of the law, wages can only go lower because employers can source cheap labour easily.