Last week, the Deputy Prime Minister said Government would not rush into adopting a minimum wage policy for the country because that would only bring the cost of doing business up and make Malaysia uncompetitive (Sunday Star, 25 February 2007).
The Government seems to be repeating the same old story despite various calls by JERIT and MTUC for Minimum Wage Act. How long more the Government would use foreign investment and competitiveness as an excuse to exploit workers in the country?
According the 9th Malaysian Plan, there are about 3.1 million workers in the manufacturing sector. These include factory workers who are earning about RM350-500 (basic salary). The 9th Malaysian Plan also shows that, manufacturing sector contributes 31.4% to Malaysia’s GDP and 80.5% towards country’s export. If the manufacturing sector and of course the workers in the sector is contributing significantly to the economic growth of the nation, why can’t they earn a decent wage.
It is a known fact that living cost in Malaysia is getting higher and higher. The inflation rate is about 4.1% in Jun 2006. That’s why, the civil servant and the police is also demanding so better wage. According to Dato’ Seri Najib, the Government agrees that there is a good reason for the salaries of lower income groups in the civil servant will be reviewed. But the Deputy Prime Minister must not forget that the factory workers are also lower income group. They are more in number compared to civil servant and
why we are allowing this group of people to be exploited by foreign investors. JERIT would like state here we welcome any salary hike for civil servant, the police and any other low income group of workers.
Will Malaysia be uncompetitive if Minimum Wage Act is introduced? Will the investors run away to country like China? A minimum wage is a minimum level of payment established by law for work performed. Its purpose is to protect vulnerable low wage workers from exploitation and poverty. This means the minimum wage should provide sufficient purchasing power to enable a worker to have a basic standard of living.
Actually, many countries already introduced minimum wage long ago and this includes China as well. New Zealand has introduced minimum wage as early as 1896, Australia in 1899 and Britain in 1909. One may say these countries are developed countries. But then, countries like Sri Lanka has introduced Minimum Wage Ordinance in 1927 and Argentina enacted Home Work Act in 1918 to provide protection for domestic workers. Other countries in South Asia and South East Asia that have implemented minimum wage are Bangladesh through Minimum Wages Ordinance 1961, also Thailand and Pakistan. South Korea and Vietnam have introduced minimum wage for its entire workforce. In Cambodia minimum wage is given to workers in textile sector. Though, the minimum wage varies from all this countries, at least they have started to implement minimum wage to protect the lower income group.
According to a research conducted by ILO, there was no negative effect on employment by moderate increases in the minimum wage. The ILO study on a multi-country statistical analysis of the effect of minimum wages on poverty, employment, and in-formalisation in developing also shows that the level of the minimum wage has an insignificant effect on the level of employment. In fact, the research proved that with the implementation of higher minimum wage, the national level of poverty has decreased in Latin American countries.
Thus, Malaysia cannot be repeating that minimum wage will make ourselves uncompetitive. The rights of workers and their social welfare must be protected by the Government. The Government should not give in to the pressure by investors and employers.
JERIT would like to take this opportunity reiterate here Malaysia should not sign the Malaysia-US FTA because that would further detoriate the workers right in the country. The Government also should not amend the Employment Act 1960 to enable employers to sack workers under probationary period without proper compensation. All this will make our workers vulnarable and suffer in their own country.
Prepared by,
Simon
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