Minimum wages are a multifaceted issue where well-meaning legislation can bring about converse effects. Who benefits in the long run and how such practices will alter employment policies are some questions to ponder. PEM takes you through many of the aspects that need thinking through.
MTUC’s lobby on minimum wages
On June 30, 2011, the National Wage Consultative Council Act 2011 was passed after four hours of debate. It replaces the Wages Council Act 1947 and will assess wage levels by sectors, types and regions in preparation for a national minimum wage policy by the end of the year. The council will have 23 members with five representatives each from unions, professional bodies and employers. Five seats have also been reserved for public sector representatives. The bill that was tabled proposed that the chairperson, deputy and a minimum of five members must be appointed from among persons who are not public officials, employers or trade union members.1
A minimum wage policy is not the same as a minimum wage law and therefore not exactly what had been hoped for. The Malaysian Trade Union Congress (MTUC) has lobbied for a minimum wage since 1996, arguing that purchasing power has fallen, trailing farther and farther behind current wage rates.2 Its survey found large disparities across companies and from region to region even among those in the same industry. In 2007, in response to a marked upward salary revision for government servants, the MTUC organised a nationwide picket and sent a memorandum to then Prime Minister Abdullah Ahmad Badawi for a minimum RM900 monthly salary plus RM300 cost of living allowance wage law aimed at increasing household income, ensuring the nation’s economic growth and reducing dependence on foreign labour.
