When there is no employment security - which should be regular employment until retirement, there can also be no financial security for workers and their families..
To be employed on short-term contracts of a year or two, makes it very difficult for the worker. There is uncertainty as to whether the worker will thereafter be able to find a new job with the same or more income. Will the worker be forced to leave his home to go to another town/state to get another job? Will he forced to leave his working spouse and family? We he be forced to find an additional and new accommodation for himself, and incur traveling cost coming back once a week to be with his/her family?
Now Malaysians, are used to buying things on loan, and month loan payment obligations is a norm. Because of low wages, these purchases on credit also include basic household appliances, etc
If the Malaysian government wants to, it is also possible to allow delays in loan payments when workers are retrenched or lose their jobs. Financial institutions should also be willing to re-structure loan repayments, especially when subsequent employment results in lower wages/income. At present, banks/financial institutions chase defaulters after a couple of months. But alas, the worker who finds himself/herself out of a job suddenly...really has no choice - No one wants the worker and their families to suffer even more.
Call for proactive steps to tackle high household debt
MTUC secretary-general fears workers may not be able to settle debts
PETALING JAYA: The Malaysian Trades Union Congress (MTUC) is
concerned with rising household debt and wants the government, financial
institutions and employers to take proactive measures to address the
issue.
In a statement, MTUC Secretary-General N Gopal Krishnam said recent
news reports that Malaysia’s household debt-to-gross domestic product
(GDP) ratio had increased to 89.1% as of 2015 from 86.8% was alarming.
The figure meant that Malaysia has one of the highest household debts
in the region, with household debt-to-GDP ratios almost doubling
between 2008 and 2015.
Gopal said the situation might worsen due to the difficult economic
situation Malaysia was facing, alongside the rising costs of living.
“MTUC is concerned that the ability of workers to settle their debt will
be affected,” he said, adding that analysts have called for proactive
measures to avoid a crisis similar to the United States subprime
mortgage crisis.
The subprime mortgage crisis in the US was caused by a high rate of
housing loan defaulters, leading to foreclosure of homes, triggering a
huge drop in real estate prices, leading to some banks going bankrupt.
Gopal urged government and financial institutions to introduce worker-friendly schemes to reduce the household debt.
He also called on employers to reduce the burden of employees by
increasing the employer’s portion of the Employees Provident Fund
contribution, provide salary increments and review monthly allowances,
including Cost of Living Allowances (COLA).
Gopal said MTUC had received complaints that the nett pay, or take
home pay, of some workers was insufficient and said that if household
debt continued to rise, it would affect workers and the nation. - FMT News, 4/4/2016
Malaysiakini seem to have carried the full statement...
MTUC worried over rise in household debt
A recent media report by The Star on April 2, 2016, which
said that Malaysia's household debt-to-gross domestic product (GDP)
ratio increased to 89.1 percent as of 2015 from 86.8 percent, is quite
alarming.
The report also stressed that at 89.1 percent, Malaysia has one of the highest household debts in the region. Malaysia’s household debt to GDP ratios have almost doubled between 2008 and 2015.
The Malaysian Trades Union Congress (MTUC) sees this figure as one of the most alarming development, and that the risk of high household debt may worsen as the nation is facing difficult economic situation.
In current environment where our daily expenses also on the rise, MTUC is also concerned that the ability of workers to settle their debt will be affected and also would contribute to other negative elements and would directly impact their daily life.
As analysts pointed out clearly, we need to take proactive measures to ensure something similar to the US subprime crisis does not happen.
It is MTUC's hope that the government and financial institutions will introduce workers friendly schemes in order to reduce the household debt. At the same, MTUC hope that employers also will take proactive measures to reduce the burden of their respective staff including increasing the employer-portion of the Employees Provident Fund (EPF) contribution and at the same give the salary increment and relook monthly allowances including cost of living allowance (COLA).
MTUC believes that every employee should have a reasonable salary and good take home pay. Lately, we hear complaints from workers that the net take-home salary is insufficient to cope with rising living costs.
If this situation persists, household debt will continue to rise and indirectly it will burden the workers and the nation.
N GOPAL KISHNAM is secretary-general, Malaysian Trades Union Congress (MTUC).
The report also stressed that at 89.1 percent, Malaysia has one of the highest household debts in the region. Malaysia’s household debt to GDP ratios have almost doubled between 2008 and 2015.
The Malaysian Trades Union Congress (MTUC) sees this figure as one of the most alarming development, and that the risk of high household debt may worsen as the nation is facing difficult economic situation.
In current environment where our daily expenses also on the rise, MTUC is also concerned that the ability of workers to settle their debt will be affected and also would contribute to other negative elements and would directly impact their daily life.
As analysts pointed out clearly, we need to take proactive measures to ensure something similar to the US subprime crisis does not happen.
It is MTUC's hope that the government and financial institutions will introduce workers friendly schemes in order to reduce the household debt. At the same, MTUC hope that employers also will take proactive measures to reduce the burden of their respective staff including increasing the employer-portion of the Employees Provident Fund (EPF) contribution and at the same give the salary increment and relook monthly allowances including cost of living allowance (COLA).
MTUC believes that every employee should have a reasonable salary and good take home pay. Lately, we hear complaints from workers that the net take-home salary is insufficient to cope with rising living costs.
If this situation persists, household debt will continue to rise and indirectly it will burden the workers and the nation.
N GOPAL KISHNAM is secretary-general, Malaysian Trades Union Congress (MTUC).
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