Hands off minimum wage

The proposal by Human Resources Minister M Kulasegaran to set a minimum wage structure for different industries makes nonsense of the purpose of institutionalising minimum wages.

According to him, the current rate of RM1,100 is too high for some sectors.

The minister should go back to learning his Minimum Wage 101.

According to the International Labour Organisation (ILO), the minimum wage is defined as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”.

This definition refers to the binding nature of minimum wages, regardless of the method of fixing them. The purpose of minimum wages is to protect workers against unduly low pay.

Minimum wages are intended to overcome poverty and reduce inequality, including those between men and women, by promoting the right to equal remuneration for work of equal value.

The purpose of a minimum wage is to set a floor while collective bargaining is meant to set wages above an existing floor.

By saying that his ministry was looking into more “relevant” basic salaries for different sectors, the minister has literally lost his bearings. The minimum wage applies across the board. To do otherwise would be to make nonsense of the concept of minimum wages.

Means testing the way to go

It’s time Malaysians got used to the idea of “means testing” because it is not only a fairer way of redistributing wealth and resources but it is the way to go in other areas such as allocating scholarships and loans in education and other sectors.

Thus, if there are employers in small enterprises who find paying the minimum wage challenging, the government should give them assistance in other forms such as fiscal incentives and other means. In no way should the minimum wage be compromised.

As for the bigger enterprises, they should pay the minimum wage since they can afford it. Obviously, these enterprises should be expected to declare their assets and profits to qualify for these incentives.

The government must also give us some assurance that the minimum wage policy will be stringently enforced since some employers have failed to observe even the latest RM1,100 minimum wage, which was passed in the Parliament.

More importantly, the government must increase the minimum wage to RM1,500 as pledged in its election manifesto. The increase of RM50 from the previous RM1,050 is an insult to human dignity and will take us till kingdom come to reach a high-income society status.

As an activist commented on his placard during the protest against the measly RM50 increase last year:

“+RM50: Are you kidding me?”

Kua Kia Soong is the adviser to Suaram.

The views expressed are those of the author and do not necessarily reflect those of FMT.