Thursday, August 17, 2023

The decrease of the labour income share to 32% is shocking...?

Malaysian workers ability to get HIGHER INCOME have been 'sabotaged' by government. As demands for workers increased, workers would have gotten more income. BUT then, the Malaysian government allowed for the bringing in of cheap migrant workers....Initially, the permission to use migrant workers was 'difficult' to ensure local workers are protected. There was a QUOTA on the use of migrant workers in a workplace - hence protecting local workers. Now, do the government still have a QUOTA for the number of migrant workers permissible in a workplace? What is the QUOTA?

Then, some employers got smart - they stopped employing migrant workers, and instead started using migrant workers supplied by Contractors For Labour, who technically was employees of these labour supplying contractors - NOT employees of the owners/operators of workplaces >> hence, the actual number of migrant workers at a workplace increased...and them quotas for migrant workers per workplace was ignored, as the number of EMPLOYEES who were migrant workers was still low - but the percentage of migrant workers was so much higher. The call for the abolition of the Contractors for Labour, and the reinstatement of DIRECT EMPLOYMENT RELATIONSHIP with the owners of workplaces is still being ignored by government.

Some foreign companies, as 'part of incentives', were allegedly allowed to use workers from their own country - TRUE or not true? The lack of transparency is a problem.

When the ringgit fell in value, the cost of labour dropped especially for foreign corporations, and also those companies that export their products which was still in US Dollars. So, the coming in of foreign investors to Malaysia now is not something the government ought to be proud of as the labour cost has dropped...??

Press statement by the Labour Law Reform Coalition on 17 August 2023 in Shah Alam


The decrease of the labour income share to 32% is shocking, LLRC calls for a government roadmap to achieve the 45% labour income share


The Labour Law Reform Coalition is shocked to learn from the Madani Economy document that Malaysia’s labour income share has dropped to 32.4 per cent in 2022, a sharp decrease from the 35.2 per cent in 2017 (BNM Annual Report 2018). That means, the workers’ share of the economy has rolled back to the status in 2011 after the Covid-19 pandemic.


Although the Covid-19 pandemic has severely and negatively impacted the jobs and incomes of Malaysian workers, LLRC had highlighted before that low unionisation rate and lack of appropriate bargaining mechanism at workplaces during the pandemic would lead to wage cuts unilaterally imposed by employers.


In addition, the decrease of the labour income share is also attributed to the lack of a concrete roadmap of the previous governments. The ambitious 48% target of labour income share stated in the Shared Prosperity Vision 2030 (SPV2030) remained elusive, a casualty of the absence of a resolute roadmap and audacious strategy to guide the way. As a result, the SPV2030 was doomed to fail.


The Madani government must learn from the previous mistakes and create a concrete roadmap for achieving the 45% labour income share in the next 10 years. Among other measures, they should have a national action plan on trade union development as a step to strengthen trade union bargaining power, which will certainly lead to higher wages and benefits for workers in Malaysia.


Trade unions act as the voice of the workforce, campaigning for equal treatment, improved working conditions and greater remuneration. The efficacy of these unions, however, is strongly based on a supportive legislative framework and dedicated involvement by the government.


We urge the government to step up to the challenge and a course consistent with the Madani values of fairness, inclusion, and social advancement. The Madani government has a chance to guide the country towards a future in which workers’ wages and benefits reflect the full value of their contributions. It is a vow to respect economic ideals of equality and justice.


N. Gopal Kishnam & Irene Xavier


Labour Law Reform Coalition

Media enquiry please contact N. Gopalkishnam at 019-3174717

Note : Labour Law Reform Coalition is endorsed by 58 Trade Unions from various sectors and worker organisations. The group started in June 2018 to initiate discussion on labour law reform based on ILO’s decent work framework. The coalition had submitted proposals of reforming Employment Act 1955, Trade Union Act 1959 and Industrial Relations Act 1967 in January and May 2019 respectively.

Gopalkishnam Nadesan is the General Secretary of National Union of Transport, Equipment and Allied Industry Workers (NUTEAIW), and former Secretary-General of Malaysian Trade Union Congress. Irene Xavier is a veteran social activist who founded Persatuan Sahabat Wanita Selangor, she has been fighting for the rights of women workers for decades.

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