PUTRAJAYA: The government will undertake a comprehensive review of the Progressive Wage Policy by the end of this year or early next year to assess whether wage incentives are translating into higher productivity and better pay for workers, said Economy Minister Datuk Seri Akmal Nasrullah Mohd Nasir.
He said the review would examine the policy’s effectiveness, including whether government incentives to employers were being matched by efforts to raise productivity through training and upskilling.
“The incentive must come together with productivity. Productivity needs to be built either through training or upskilling that needs to be arranged.
“It cannot be, for example, that the incentive is channelled but employers do not take the next step to increase productivity,” he told reporters after the ministry’s monthly assembly today.
The Progressive Wage Policy is currently being implemented and is scheduled to run until the end of 2027. Akmal said the government wanted to assess its effectiveness before determining how the policy should progress.
His remarks came after the Department of Statistics Malaysia (DOSM) released its Salaries and Wages Survey 2025, which showed continued growth in Malaysian wages.
Akmal said the latest wage figures should be treated as a baseline for the implementation of the 13th Malaysia Plan, with the government’s focus shifting towards building a clearer wage structure beyond simply raising the minimum wage.
He said wage policy needed to cover three areas: protection through the minimum wage, progression through higher wage levels and better returns for highly skilled workers.
On the minimum wage, Akmal said reviews should continue to be carried out periodically in line with the government’s broader economic plans.
“This is a whole-of-government approach and involves the collective participation of the Cabinet, but the process should move periodically,” he said.
The current minimum wage of RM1,700 took effect on Feb 1, 2025.
Akmal also said wage growth could not be separated from productivity, investment and the quality of jobs created in the economy.
He said Malaysia should move beyond measuring the success of foreign investment purely by the amount of capital brought into the country, with investments instead assessed based on the quality of jobs created, local vendor participation, productivity and skills generated.
“Investment figures alone do not guarantee good returns for the people,” he said.
Akmal said the government wanted investments to create more skilled and semi-skilled jobs while strengthening local companies and vendors and improving productivity.
He said this was also why the 13th Malaysia Plan placed emphasis on technology and innovation as part of efforts to address structural wage issues.
“We definitely want to look for investment that can actually be translated into added value across the sectors that we are focusing on. It’s not just the number of investments coming in,” he said.
