PETALING JAYA: Having a different set of minimum wages for skilled workers and university graduates will disrupt the market wage structure and burden employers, says Malaysia’s largest employers group.
The Malaysian Employers Federation (MEF), which represents over 5,000 corporate members and 22 association members, was responding to suggestions by Deputy Prime Minister Ahmad Zahid Hamidi and the Malaysian Trades Union Congress (MTUC) president Abdul Halim Mansor to raise the minimum wages for technical and vocational education training (TVET) workers and university graduates.
Zahid had proposed that local TVET workers receive a minimum salary of RM3,500, while Abdul Halim said degree and masters graduates should not be left out of this proposal.
But MEF executive director Shamsuddin Bardan said people should not be too fixated on starting salaries.
“For TVET workers, RM3,500 is way above market rate. Any rate beyond a country’s minimum wage should be determined by market forces,” he told FMT.
He said the current market starting rate for TVET workers was between RM1,800 and RM2,200, whereas for degree holders it was between RM2,000 and RM2,500, and for masters graduates it was about RM3,500.
“In Malaysia, employers do give increments so you won’t be stuck with your starting salary for the next 10 years.
“This is something many people refuse to understand. In some countries, they pay a fixed salary for a certain skill-set. So if a gardener earns RM2,000, this figure will remain regardless of how much experience he has.”
But in Malaysia, he said, there was a starting pay as well as a maximum pay, and if employees showed their bosses that they could perform, there was no reason why a company wouldn’t increase their salaries.
“We shouldn’t regulate wages this way. We will end up killing market rate wages and put a strain on a company’s finances.”
Klang MP Charles Santiago, however, said as long as employers remained reluctant to increase wages, the country would not be able to secure highly skilled workers or take the lead in areas involving high technology.
Speaking to FMT, Santiago, who is also an economist, accused employers of being greedy and said it was high time that they looked beyond their pockets.
“Recent studies have shown that Malaysians are paid low despite an increase in productivity. Employers need to prioritise the good of the country as well,” he said.
He also expressed concern over whether an increase in minimum wages for skilled workers would motivate some employers to hire foreigners instead of locals.
“This could mean employers would be more keen on hiring foreign skilled workers.”