MTUC against minimum wage based on sectors

MTUC secretary-general J Solomon dismisses claims that some businesses were being closed because of the establishment of the minimum wage.

PETALING JAYA: The Malaysian Trades Union Congress (MTUC) said the National Wages Consultative Council should only set the minimum wage and not be seen as exceeding its jurisdiction.

Its secretary-general J Solomon said, in a unionised environment, the wages were negotiated by unions and employers and it would be inappropriate for others to determine the wages.

“Therefore it may not be the perfect idea to set minimum wages based on sectors because even establishments within the same sector may have wide gaps in their profit margins,” he told FMT.

He said, otherwise, for obvious reasons employers might use the minimum wage set by the council, which would necessarily be the lowest, for negotiation and not based on the “living wage and affordability”.

He dismissed claims that some businesses were being closed because of the establishment of the minimum wage, calling it “absolutely ridiculous”.

He said no business in the world would be closed because of a minimum wage being in place.

Solomon said employers had made such claims before but when MTUC asked for evidence, they could not provide it.

“It would be interesting if the minister could furnish us the names of such companies for us to evaluate and give our views.”

He said Malaysia was “well known” for inequality in wealth distribution and the country should work towards eliminating it rather than promoting it further.

He also said the business community must be reminded that the wealth of the nation was not for themselves and their families.

“They must cultivate the habit of sharing it equitably with those who have contributed to their wealth.”

Human Resources Minister M Kulasegaran had earlier defended his statement about having different minimum wages for different sectors, saying that he was merely following the recommendations of the National Wages Consultative Council Act 2011.

“Under (Act 732), in Sect 22(b), the coverage of recommended minimum wage rates can be according to sectors, type of employment and regional areas,” he had said.

Previously he said that Putrajaya would look into setting different minimum wages according to sectors after taking into account the current realities of each sector and those that might not be able to sustain the increased rates.

Charles Santiago.

Meanwhile, Klang MP Charles Santiago said the minimum wage rates should be determined based on the region rather than according to different sectors.

He said that would be more logical as the cost of living was different in different places.

“The cost of living in an urban area is far higher than that in a rural area, therefore wages in the urban area should be higher.

“For example, the cost of living in Kuala Lumpur, Selangor, Penang, Johor and Perak is far higher than that in Kelantan and Terengganu.

“Even in Kelantan, between rural and urban, there can be a difference. The more urban you are, the higher your cost of living and, therefore, your minimum wage should be based on that.

“That is why we should take a region-based minimum wage approach,” he said.

He noted that Indonesia, for instance, decided the minimum wage based on different regions.