PETALING JAYA: In a televised debate on Wednesday (Aug 9), Rafizi Ramli, the Economy Minister of Malaysia, highlighted low wages as one of the three major structural problems affecting the country’s economy. He stated that around 50% of Malaysians earn less than RM2600 per month and attributed the economic lag to the heavy reliance on primary industries such as plantations and oil and gas.
Rafizi pointed out that Malaysia has stagnated in developing other industries due to the success of these primary sectors, resulting in a lack of wage increases in sectors like manufacturing and services. He expressed concern that neighboring countries like Indonesia and Vietnam are also offering low wages, diminishing Malaysia’s competitive advantage. He emphasized the importance of keeping up with expertise and technology to rival countries like South Korea, Japan, and Europe.
The Economy Minister identified low wages as the second structural problem in the economy, as salaries have not kept pace with rising prices. Quarterly wage statistics were introduced under Rafizi’s leadership, which confirmed that 50% of workers earn below RM2600 per month, only RM20 above the poverty threshold of RM2580. He added that the median wage for those in their first jobs is RM1,682 per month, RM182 higher than the minimum wage of RM1,500. Low wages make it challenging to develop skilled individuals capable of contributing to an innovative and high-value economy.
Rafizi also addressed the poor fiscal position resulting from slow economic growth. He criticized previous governments for relying on debt to stimulate economic growth and announced stimulus packages. This approach is unsustainable and burdens future generations. With low economic growth and wages, tax collection by the government also decreases. Rafizi criticized the government for giving out cash aids and subsidies that do not address the core issues.
He argued that the three structural problems cannot be solved by resorting to old methods, particularly debt. Prime Minister Datuk Seri Anwar Ibrahim has introduced the Madani Economy Framework to address these issues. Rafizi highlighted that this is the first time the government intervened to address wage issues in both the civil service and the private sector through a progressive wage model.
Credit: The Star : News Feed
