KUALA LUMPUR: Although Malaysians complain that the cost of living is high, according to the Malaysian Institute of Economic Research (MIER), this is not where the problem truly lies.
The problem, according to MIER, is that the wages Malaysians earn are simply too low.
The Edge Markets quoted MIER executive director Zakariah Abdul Rashid as saying the nominal income of Malaysians was “too low”.
He added that the current situation, where Malaysia was dependent on low-skilled workers, also exacerbated matters. Malaysia, therefore, needed to address the fundamentals for a long-term solution, he said.
Speaking at a press conference after MIER’s 23rd Corporate Economic Briefing, Zakariah said the labour market was a key factor in overcoming this issue.
Although the unemployment rate is 3.4% and always below the 4% level, the labour market is not good, the report said.
“Our labour market pays very little nominal income. It is very slow paced and the skill level of our labour market is not improving.
“This aggregate number of 3.4% can be misleading as it hides the unpleasant side of the labour market, the low pay, low productivity and low skills,” Zakariah said.
He said the authorities should review the “production structure” if they wanted to address the situation.
On the country’s move towards the Industrial Revolution 4.0, where artificial intelligence will play a key role, he said the manufacturing, agricultural and production sectors were still lagging behind. These sectors were still labour intensive and dependent on low-skilled workers, he added.
The Edge Markets quoted him as saying this created a domestic problem as employers were more inclined to pay lower wages, further driving down the nominal income.