Economy, Human Resources Ministries to prepare wage policy options, says Rafizi

KUALA LUMPUR: In an effort to address the issue of low wages and the rising cost of living, the Economy Ministry is collaborating with the Human Resources Ministry to develop policy options. These options will be presented to the National Economic Action Council (NEAC) for discussion and consideration.

Economy Minister Rafizi Ramli emphasized the importance of engaging key stakeholders, including the government, employers, and workers, to gather their views and opinions. This inclusive approach will help ensure that the ultimate policy decisions are comprehensive and take into account factors such as affordability, cost implications for the private sector, and the mutual agreement of all parties involved.

Rafizi’s response comes after the Malaysian Employers Federation (MEF) claimed that wage-related policies are the responsibility of the Human Resources Ministry, not the Economy Ministry. However, Rafizi expressed hope that the private sector would cooperate and support the government’s progressive wage increase policy, which aims to alleviate the burden of living expenses for the Malaysian population.

While the Economy Ministry primarily focuses on the country’s overall economic planning, Rafizi stressed the importance of addressing the issue of fair wages in order to promote Malaysia’s transition to a high-income economy. He cited the low-skilled labor dependency as one of the factors contributing to wages that do not align with the value of workers’ income.

Rafizi highlighted the significant disparity between Malaysia’s Compensation of Employees (CE) to Gross Domestic Product (GDP) ratio, which stands at 35.9% in 2019, and other developed countries such as Germany (59.4%), the United Kingdom (55.5%), Australia (46.9%), and the Republic of Korea (46.8%). He also noted that median wages and entry-level wages have decreased further following the pandemic, emphasizing the urgency of addressing this issue.

Furthermore, Rafizi emphasized that wage growth is a key aspect of the structural reforms needed to achieve the CE target outlined in the 12th Malaysia Plan.

Overall, the Economy Ministry’s collaboration with the Human Resources Ministry showcases the government’s dedication to improving living standards and promoting fair wages for all Malaysians. The policy options developed through this partnership will play a crucial role in shaping Malaysia’s economic landscape.