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Minimum wage ‘half-baked’ attempt

 | May 2, 2012

An economist, however, says that East Malaysians would be grateful for the minimum wage but will be questioning the 'perceived inequality'.

PETALING JAYA: A political observer has branded the newly introduced mininum wage as a “half-baked” attempt to settle a long-standing dispute.

James Chin of Monash University noted that if it was a living wage that the government had in mind then the rate had to be nothing less than RM1,000.

Prime Minister Najib Tun Razak on Tuesday had instead announced a minimum wage of RM900 and RM800 that had been set for Peninsular Malaysia and Sabah and Sarawak respectively.

In light of this, Chin dismissed any notion of the minimum wage causing positive ripples for Barisan Nasional in an election that is still tipped to take place next month.

“The strongest hint of this is the silence on the part of the Malaysian Employers’ Federation (MEF) which is usually the first to issue a statement,” he stated.

“MEF’s silence is a clear indication that the minimum wage will not have any effect on employers or workers. It will benefit a small minority and have a public relations impact but that’s about it.”

Chin also pointed out that unions had been lobbying for RM1,500 as the minimum wage and therefore the proposed rate would not make any notable difference.

He also questioned whether the rate was meant as a basic salary or overall pay.

According to him, if it was the former then those who are working in low-end jobs would benefit, but if it was the latter then nothing would change.

“Many people in low-end jobs are already working overtime,” Chin said. “And the rate doesn’t cover casual workers (workers paid on a daily basis) as they too already work overtime.”

Another party that believed the minimum wage had fallen short was the Malaysian Trades Union Congress (MTUC), Sarawak branch, which balked at the “unfair” gap between the two rates.

Its chairman, Mohamad Hamid Ibrahim, yesterday pointed out that the cost of living was up to 25% higher in Sarawak and that workers at fast-food outlets in Kuching were paid just before the poverty line of RM962.

‘East Malaysians would be grateful’

But Centre for Public Policy Studies (CPPS) chairman Ramon Navaratnam believed that many East Malaysians would nevetheless be grateful for the minimum wage despite the discrepancy.

“Any gift is appreciated and this is one that is long overdue,” he told FMT. “On the whole, the rate is more than satisfactory, acceptable and very timely.”

He clarified that while the rate for East Malaysia was “technically” reasonable it was however “politically ill-advised” as it could raise questions of “perceived inequality”.

“Workers in East Malaysia may demand to know why they are being treated differently,” Ramon said.

“They may feel that they should be compensated more as they are deprived of the facilities enjoyed by Malaysians in the Peninsula.”

Asked if this would bear a negative impact on BN during the next general election, the prominent economist said that the number of grateful East Malaysians would trump the number of unhappy voters.

“No there won’t be a backlash against BN,” he stated. “Anyway, backlash is too strong a word to use for just a small group of unhappy people.”


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