MP SPEAKS | The impending Budget 2025 which is to be tabled in October has brought about another round of debate on the minimum wage.

There are various opinions on this given issue that seem to focus on the quantum to be increased rather than moving progressively forward in building an ecosystem that would help raise the income of workers.

There is a historical dichotomy between employers and unions in Malaysia on the rationale of minimum wage since its implementation in 2013.

The minimum wage in Malaysia remains unchanged at RM1,500 per month since 2023.

According to the latest report by the United Nations Children’s Fund (Unicef), the minimum wage for Malaysians should be set at RM2,102 as RM1,500 is too low for workers to sustain themselves and their families.

The UN-backed study said its proposal for the new minimum wage was made in light of several contemporary factors, including the high cost of living that is causing many Malaysians to struggle to make ends meet.

This revised new minimum wage proposed by Unicef is slightly lower than the RM2,700 living wage proposed by Bank Negara Malaysia.

The question is why are we still in the minimum wage paradigm when the nation is moving towards a stakeholder culture by embracing sustainable development that embraces a living wage?

Decent standard of living

Living wages are determined by scientifically assessing the needs for a basic but decent standard of living.

A living wage considers the exact costs of basic needs like housing, food, and transport, and also adjusts for the difference between net and gross pay so that employees are sure to take home a sufficient sum.

Ensuring living wages for all workers will accelerate the achievement of a wide range of Sustainable Development Goals (SDGs), in particular, Goal 1: No Poverty, Goal 8: Decent Work and Economic Growth, as well as Goal 5: Gender Equality and Goal 10: Reduced Inequalities.

What is needed is a holistic policy in building an ecosystem that would ultimately support the transition towards a living wage.

The ecosystem would support the investment in human potential and technology that would in turn increase productivity and churn out the capacity for a living wage.

The question is do we have adequate education institutions that would help reskill and upskill our youths? Do we have institutions that are fine-tuned and attractive to encourage Malaysians to upskill and reskill?

Have the majority of the small- and medium-sized industries migrated to a more digitalised system that improves productivity?

While we do have an embryonic stage of the progressive wage model to upgrade the skills of workers, it is based on government incentives and voluntary basis instead of empowering the small- and medium-sized industries to upgrade their technology.

Unless there is a tripartite vision of upgrading our human and technological capabilities that would sustain our migration to living wages, we will be stuck with the minimum wage model that does not adequately cover the living expenses of families.

Therefore, it is time to create a foundational ecosystem that would support the transition from the minimum wage to a living wage.

M KULA SEGARAN is Ipoh Barat MP.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.