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 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 has also been a historical dichotomy between employers and unions in Malaysia regarding the rationale of minimum wage since its implementation in 2013.

Currently, the minimum wage in Malaysia is at RM1,500/month. According to the latest report by the United Nations Children 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 current factors, including the high cost of living that is causing many Malaysians to struggle to make ends meet.

This revised new minimum wage, as proposed by Unicef, is slightly lower than the living wage of RM2,700 as proposed by the 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?

Holistic policy needed

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 transportation and also adjusts for the difference between net and gross pay so that employees are sure to take home a sufficient amount.

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; Goal 5: Gender equality; and Goal 10: Reduced inequalities.

What is needed is a holistic policy to build an ecosystem that would ultimately support the transition to a living wage.

The ecosystem would then support investments in human potential and technology, which would, in turn, increase productivity and produce 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 fine-tuned institutions that are attractive to encourage Malaysians to upskill and reskill?

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

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

Unless there is a tripartite vision of upgrading our human and technological capabilities to 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 will support the transition from the minimum wage to a living wage.

M KULA SEGARAN is Ipoh Barat MP.

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