Why no discussion on minimum wage increase?

I watched Prime Minister Anwar Ibrahim’s live telecast speech yesterday. In spirit, we in the PSM welcome the Government’s move on the oil subsidy. Our only concern previously was that the Government must demonstrate how the money is used to assist the B40 and M40. What was truly disappointing, however, was the PM’s emphasis on increasing civil servant wages while again refusing to address the minimum wage issue. He indicated as if it were solely the private sector’s responsibility to raise wages, when in reality, it is the role of his Government and his cabinet to review and announce the minimum wage.

During his speech, Anwar addressed the seriousness of his Government’s commitment to the progressive wage policy for the private sector. Yet, according to Government documents, this policy remains voluntary, limited in scope, and currently serves as a pilot project.

Similarly, at his May 1 Workers’ Day speech, attended by approximately 3000 people at the grand air-conditioned PICC Convention Centre in Putrajaya, sponsored by the Government, the Prime Minister’s most significant announcement was the news of a salary hike of over 13 per cent for civil servants starting December this year, one of the highest increases in the nation’s history.

He also stated that the government would ensure that the minimum income for civil servants exceeds RM2,000 per month. Furthermore, he expressed hope that private companies would follow the government’s lead in raising civil servants’ salaries.

While he emphasizes the need for the private sector to increase wages, he forgets that the minimum wage increase is a cabinet decision, and the power lies in his hands. Employers have historically not raised wages for low-earning workers unless compelled by law. This is also true for the hundreds of thousands of contract workers in government premises, schools, hospitals, and elsewhere, who are paid through the Government tendering process where contractors are appointed by the Government.

At the same event, Human Resource Minister YB Steven Sim delivered a speech that, while eloquent and poetic, only briefly mentioned that the minimum wage would be reviewed this year. He then proceeded to discuss the Progressive Wage by the Economic Minister, which, in real terms, is only a pilot project with limited scope.

During his Workers’ Day speech in 2023, Anwar stated that his government would prioritize increasing the wages of workers across the country. He emphasized, “I don’t want employers, economists, or ministers to dispute employee wages. Our responsibility is to raise wages for both private and public sector workers.” Additionally, he mentioned that the issue of Minimum Wage would be discussed at the Cabinet meeting the following month, scheduled for June 2023.

This raised a question in my mind: why hadn’t the Government announced a minimum wage increase, considering that the deadline for it would technically be May 1, 2024? This deadline stems from the two-year term of the 2022 wage increase announced by Prime Minister Ismail Sabri, which would expire on April 30, 2024.

While government and union officials celebrated May Day at a gala event, approximately 1,500 workers and activists from various backgrounds took to the streets of Kuala Lumpur in scorching heat to rally for various demands, including a living wage of RM 2000.

In many countries, it’s a tradition for unions to march on May Day to advocate for their demands, as May 1st itself emerged from numerous struggles and sacrifices. In Malaysia, there was a significant fight to have May 1 declared a holiday. However, today, most unions, representing only 6% of the workforce, seem unenthusiastic about organizing rallies on Workers’ Day, often taking it for granted.

PSM has previously stated that, based on the government’s minimum wage formula, the minimum wage for rural Malaysia should be RM 1884, for urban Malaysia RM 2568, and the national average should be RM 2444. The United Nations Children’s Fund (Unicef) suggests a minimum wage rate of RM 2,102 per month, which Rafizi mentioned the government would comprehensively study.

In recent weeks, it was reported that Zainal Rahim Seman, the former chairman of the Public Services Commission, has been appointed as the chairman of the National Wages Consultative Council. His term is effective from May 1, 2024, to September 30, 2026. Additionally, the report mentioned that the national wage consultative technical committee has completed its review of the Minimum Wage Order 2022, which will be discussed and finalized at the next council meeting.

This development is concerning because, unlike previous years, none of us were aware of this appointment, nor were we consulted, unless it was done with a very select group of people.

Nevertheless, the Prime Minister has already indicated an increase in the minimum bar for civil servants to beyond RM 2,000. Therefore, any minimum wage below RM 2000 would be scandalous. While we recognize that increasing civil servant salaries would be a politically prudent move to garner support, the reality is that employers’ lobbies would push to keep wages low. It is time for the Madani Government to align its rhetoric with its implementation.

The silence and lack of discussion surrounding the Minimum Wage issue are troubling.

S. Arutchelvan
Deputy Chairperson
Parti Sosialis Malaysia