Minimum wage hike must lift pay across salary ladder, academic says
PETALING JAYA: If Malaysia raises the RM1,700 minimum wage without adjusting pay scales further up the chain, graduates and skilled employees could end up earning barely more than those at entry level, said an academic.
Putra Business School associate professor Dr Ida Md Yasin said any increase in the wage floor would have a ripple effect across organisations, requiring employers to reassess pay for workers at different levels rather than simply increasing salaries at the bottom.
READ MORE: Minimum wage should help workers save, own homes, not just cover expenses: Expert
READ MORE: RM700,000 gone in 21 days: A wake-up call for retirement planning
“We cannot have a situation in which a graduate earns almost the same as someone at the lowest rank, or perhaps only RM500 more than them.”
Ida said the government’s wage review should be more than a question of how much to add to the RM1,700 floor but also how the increase would affect the broader wage structure.
“If the government wants to increase the minimum wage, the increase should not only apply to the lowest rank in an organisation. Wages across the other ranks should also be adjusted accordingly.”
She was commenting on Human Resources Minister Datuk Seri R. Ramanan’s statement that the government is reviewing the RM1,700 minimum wage, with the National Wages Consultative Council to decide whether it should be maintained or raised.
Bank Negara Malaysia’s 2018 estimate put the living wage for a single person in Kuala Lumpur at RM2,700 a month.
Ida said that figure is already significantly higher than the current minimum wage, with the gap becoming harder to justify as living costs rise. “Even the data from 2018 showed that RM2,700 was probably the basic wage needed for a single person to live decently in Kuala Lumpur.
“What more now, with inflation having increased due to rising oil prices and other factors.”
She added that the problem extends beyond minimum-wage workers, with some graduates and skilled workers receiving salaries that do not adequately reflect their qualifications.
She said sometimes, wages do not reflect the skills employees have but they have no choice because there are not enough job opportunities.
Ida said this is particularly concerning as Malaysia pushes towards higher-value industries, in which better-skilled workers should command stronger wages.
“If a company is making a profit, we need to look at how that profit is distributed. Some of it can also be used for reinvestment.”
Ida said the issue could not be solved through the minimum-wage policy alone as much of the adjustment has to happen at company level.
She pointed to the wide gaps that could exist between the highest and lowest-paid workers in an organisation, adding that companies should examine whether such disparities are excessive.
“I’m not saying that everyone should be paid equally. Of course, wages have to correspond with productivity. I personally hope that the increase in wages is at least equal to inflation, or higher, so that our standard of living actually improves.”
Ida said raising the statutory minimum wage alone would not resolve Malaysia’s broader labour market problems, particularly if employers continue to underpay workers.
She said enforcement against illegal underpayment, including cases involving foreign workers, should remain important to ensure that higher wage floors translate into better wages.
