Sunday, March 09, 2014

Malaysia minimum wage RM4.33 per hour, other countries RM30.88 - RM25 per hour?

Now, Malaysian Minimum wage is pathetic. Let's consider household that qualify for BR1M, that is households earning RM3,000-00 or less. Now, in a Malaysian household where both husband and wife are working earning minimum wages, they will qualify for BR1M. So, logically, we should at the very least have a minimum wage that will ensure that workers and their familes earn sufficient NOT to qualify for BR1M - that means, Minimum Wages must be at least RM1,500-00, no even more than that considering statutory wage deductions and if we want the worker to take home at least RM3,001-00 per month.

Minimum wage rates was set on 16/7/2012 vide Minimum Wages Order 2012, but of course all workers would have started enjoying minimum wages only on 1/1/2014.

Since, the Minimum Wages was determined in July 2012, there has been a serious increase in the cost of living - but there has been no increase in the Minimum Wage rate, and this is unacceptable.

There may be a problem for micro-businesses(employers) to be able to pay minimum wages, but this could be remedied by maybe a 'profit-sharing' arrangement between employer and worker. This may be an arrangement which will work for small contractors, restaurants, small holders, etc - so take home wages will depend on profits of the month, and this should appease both employer and worker.  Maybe, the employer should be entitled to 50% of profits, whilst the rest be divided amongst the workers...or maybe some other formula. Maybe, businesses should re-think the large wages now being paid to CEOs and management, Directors, etc ... as a rule of thumb, no more than 5 times the wages of the lowest paid worker(or Minimum Wage).  In any event, Malaysia needs to increase the Minimum Wage rate... in fact, this rate need to be reviewed every 6 - 12 months.

Let us look at other countries and their minimum wage this article that appeared in FMT News

Top 5 countries with the highest minimum wage

March 7, 2014 
Here we take a look at the list of top countries in the world with the highest minimum wage, just to give the rest of you out there the motivation to keep on looking for that 'perfect job'!
unnamed (1)By Caitlyn Ng

Now how many people can actually say that they are willing to work for free, or would not mind being paid peanuts? Yes, there are many kind-hearted souls out there who take up a cause to help others in need which do not command a high salary, and we must commend them for their actions. However, for the rest of us who toil and slug away at regular jobs, the amount of wages earned is an important factor that is taken into serious consideration before accepting any job.

This writer also went through the initiation of feverishly running through all the different types of jobs in the market, considering the wage, the benefits, the location etc before finally settling on one. It isn’t an easy task and I must admit I got a little side-tracked every once in a while during the application 
 processes (hey look, an opening for a position to be a babysitter for a wealthy family!) but in the end, it was quite an experience in itself. Out of curiosity, I wondered how much other employees in countries all over the world earned. Here we take a look at the list of top countries in the world with the highest minimum wage, just to give the rest of you out there the motivation to keep on looking for that “perfect job”!

How does Malaysia compare with the rest of the world?

According to the Malaysian Minimum Wages Order that was decreed to begin on 1 January 2013, the monthly rate for employees in Peninsular Malaysia would be RM900 whereas the hourly rate would be RM4.33. As for Sabah and Sarawak as well as Labuan, the monthly rate for employees would be RM800 whereas the hourly rate would be RM3.85. So how do we fare when compared with the other countries?

Disclaimer: The data is gathered for countries with readily available information on their hourly minimum wage. Due to the international nature of the data, the currency has been standardised to the international dollars (also known as the Geary-Khamis dollar), which is a hypothetical unit of currency. An international dollar would buy in the cited country a comparable amount of goods and services a U.S. dollar would buy in the United States. There is also the converted rate in MYR for easier reference purposes. Since the rates are hourly, it is assumed that an employee works 8 hours a day and 22 days a month, to calculate the monthly rate.

5) Netherlands ($9.58 / RM30.88 per hour / RM5,434.88 per month) 5The Netherlands forms what is known as the “Low Countries” with its two other neighbours, Belgium and Luxembourg, the combination of which is called “Benelux”. With approximately 20% of its area and 21% of its population located below sea level, it goes to show what a geographically low lying country Holland (as it is referred to in its entirety) is.

The capital is Amsterdam where The Hague is the seat of the government, and is known as the “world’s legal capital” due to four international courts and Europol being located there. With a developed economy, The Netherlands is one of the world’s 10 leading exporting countries and is in the top 20 of the list of GDP (both PPP and nominal) per capita. Based on 38 working hours per week, the law has set the minimum wage at $9.58 for employees.

4) Belgium ($10.13 / RM32.65 per hour / RM5,746.40 per month) 4
One of the founding members of the European Union as well as hosting its headquarters, this country is also known as the Kingdom of Belgium, being a federal monarchy in Western Europe. The country is unique, in the sense that it is clearly divided into two main linguistic groups: the Dutch-speaking Flemish with a dynamic economy (from the region of Flanders in the north) and the French-speaking Walloons with a slightly lagging economy (from the region of Wallonia in the south).

Belgium has a strongly globalised economy and is placed in the top 20 on the list of GDP (both PPP and nominal) per capita. The legal minimum wage takes into consideration a person’s age and experience, but is generally set at $10.13, which is the 2nd highest in Europe.

3) Australia ($10.60 / RM34.17 per hour / RM6,013.92 per month) 3 3
At the risk of sounding stereotypical, marsupials and “G’day mate!” are probably the most common ideas which people associate with the Land Down Under. However, with a strong developed economy that is ranked as one of the largest in the world, Australia is also identified easily as one of the wealthiest countries.

Being in such an advantageous position means that it also ranks as the top 10 on the list of GDP (both PPP and nominal) per capita in addition to having high positions in many international comparisons of national performance. The Australian national minimum wage of $10.60 is “the minimum wage that applies to employees who aren’t covered by an award or agreement”.

2) France ($10.64 / RM34.30 per hour / RM6,036.80 per month) 2
Oui, this is the country of romance, where many lovestruck couples go to profess their undying affections. On a more serious note, being the 3rd largest country in Europe as a whole allows France to be a major force to be reckoned with in Europe, ever since the Late Middle Ages.

In addition, it is blessed as a prominent global centre of culture, housing the 4th largest number of cultural UNESCO World Heritage Sites in the world. The country is in the top 30 of the list of GDP (both PPP and nominal) per capita, owing to the strong performance in their economy. In 2012, France announced that for SMIC (Salaire Minimum Interprofessionnel de Croissance), there will be the first real-terms increase in the minimum wage for six years and they now have a minimum wage of $10.64.

1) Luxembourg ($11.10 / RM35.78 per hour / RM6,297.28 per month) 1
Also known as the Grand Duchy of Luxembourg, this is the one and only remaining grand duchy in the world. This is a term coined for a territory whose head of state is not a king or queen, but a grand duke or grand duchess instead.

As a developed country with an advanced economy, this country manages to maintain its position in the top 5 on the list of GDP (both PPP and nominal) per capita. With a relatively straightforward wage structure that takes into consideration a person’s experience and age before determining the rate, the minimum wage of $11.10 means Luxembourg takes the top spot on this list.

A quick look at figures
Minimum Wage
$11.10 / RM35.78 per hour / RM6,297.28 per month
$10.64 / RM34.30 per hour / RM6,036.80 per month
$10.60 / RM34.17 per hour / RM6,013.92 per month
$10.13 / RM32.65 per hour / RM5,746.40 per month
$9.58 / RM30.88 per hour / RM5,434.88 per month
$9.20 / RM29.66 per hour / RM5,220.16 per month
United Kingdom
$8.76 / RM28.24 per hour / RM4,970.24 per month
New Zealand
$8.59 / RM27.69 per hour / RM4,873.44 per month
San Marino
$8.38 / RM27.01 per hour / RM4,753.76 per month
$8.03 / RM25.88 per hour / RM4,554.88 per month
Peninsular Malaysia: $1.34 / RM4.33 per hour / RM900 per month
Sabah, Sarawak and Labuan: $1.19 / RM3.85 per hour / RM800 per month

Caitlyn Ng is an Investigative Journalist of, an online consumer advice portal which aims to help Malaysians save money through smart (and most of the time painless) savings in their daily banking, technology, and lifestyle spending habits.


Vern Hue said...

While I agree that the Malaysian minimum wage should be increased as it is very low and unreasonable - this article also discount the fact that the mentioned countries above do have very high tax rates. The highest tax threshold in Australia is 46%. That is almost have of what Malaysia's.

Thrift Lifestyle said...

Imagine surviving on Living with Minimum Wage in Malaysia on monthly basis. No hope for savings or any luxuries.

currently doing experiment on living on minimum wage for a month and documenting it on my blog. feeling like extreme cheapskate.