Wednesday, April 24, 2024

With RM1.5 Trillion Debt, should Malaysia increase wages of 1.7 million Public Officers? Maybe only those who earn below RM4k? But increase MINIMUM Wages now for all?

What? On the occasion of the coming May Day, Prime Minister Anwar is announcing the increasing wages of civil servants - employees of the Federal Government but what about the rest of Malaysian workers, remembering that all workers including the self employed all contribute to the development and well-being of Malaysia.

Just recently, RAYA AID was given to again Federal Government employees and pensioners - forgetting again the poor, the private sector workers, self employed...

CAN MALAYSIA AFFORD INCREASING WAGES OF ITS EMPLOYEES - THE CIVIL SERVANTS? Should the increase of wages be limited to just the Federal Government workers that earn less than RM4,000? 

Bureaucracy. Malaysia's bureaucracy is one of the biggest in the world, with 1.7 million civil servants to a population of 32 million, a ratio of 4.5% compared with Singapore's ratio of 1.5% civil servants to total population, Hong Kong's 2.3% and Taiwan's ratio of 2.3%.

Why so HIGH? Some say it was because Malaysia's graduates did not have the needed quality to be attractive to the Private Sector, and hence the government absorbed many who were sent on scholarship and government loans into the civil service. Some were even absorbed as teachers, without the required skills and interest - and it has affected the education system..

REMEMBER the Malaysian Federal Debt(Liabilities) is about RM1.5 Trillion. 

Remember that the Malaysian Household debts, i.e. the current personal debt of individual Malaysians also is more than RM1.5 Trillion.

No 'Raya Aid' for the private sector workers, self employed or the POOR - just for civil servants and government pensioners? RM1.5 trillion debt? borrow and spend as normal? Debt service charges HIGHER than operating expenditure?

In 2023, the Federal Government allocated RM46. 1 billion or 15.2% of revenue (2022: RM41. 3 billion; 14%) for debt service charges (DSC).
Despite the high number of government employees, the government still have contracted out services like cleaning, security guards, school wardens, etc..

MINIMUM Wages was last increased from RM1,200 to RM1,500 was in May 2022, and possibly relying on facts and situation in Malaysia in January 2022 or even earlier. 

The last time the government reviewed the minimum wage was in May 2022, increasing it from RM1,200 to RM1,500.
BUYING POWER or monies value had significantly declined because of the declining value of the Malaysian Ringgit...

January 2022 - 1 USD = 4.1725 MYR

May 2022 -  1 USD = 4.3535 MYR

Apr 2024 - 1 USD = about 4.8

Therefore the Buying power of  the Ringgit - you need more Ringgit to buy things 

Say, you needed RM1000 in January 2022, in May 2022 you needed RM1043, and today in 2024 we would need RM1151 to buy the same thing that cost RM1,000 in January 2022.

When the Ringgit dropped - prices for everything increased. Why? Because even those whose product or services cost did not increase - they now needed more money to compensate for the increase in cost of living.

YES, the government can come in with SUBSIDIES to ensure people can still afford to buy the same things at the 'same price' in 2022 - but that cannot solve the problem as subsidies can cover only some items - In the market, the price of kambing, beef, fish, pork, ayam kampung, Ipoh Chicken, etc had all sky more and more people simply could not buy it as the price increased but not INCOME. Subsidies means the GOVERNMENT must spend more - compensate the manufacturer, middle man and seller of products and services. How much did the Government spend for the TOL Free days during festivals?

At a minimum, what the government could have done was to INCREASE THE MINIMUM WAGE accordingly - no need to wait for several years and adjust Minimum Wages.

When cost of living rises for whatever reason, immediately(or within weeks), increase the MINIMUM WAGE. Sadly, many employers simply pay the Minimum Wages when they ought to pay their workers more...

Now, this PM Anwar Ibrahim led Pakatan Harapan led coalition government again is giving the impression that Minimum Wage can only be reviewed once every TWO(2) years - BUT THIS IS NOT TRUE. Minimum Wages can be increased at any time...

Section 25(1) NATIONAL WAGES CONSULTATIVE COUNCIL ACT 2011 says ' (1) The Council shall, at least once in every two years, review the minimum wages order.' 

It says 'at least once in every 2 years' - that means that there can be more reviews, any number of reviews. What the ACT is saying is that at a minimum, it must be once every 2 years. 

Given the current situation in Malaysia, there must be REVIEWS and new Minimum Wages every time the cost of living rises for whatever reason so that Malaysians and workers can at least earn a MINIMUM Wage sufficient to meet the living expenses of themselves and their family/dependents. 

If these poorest of workers cannot earn sufficient, they may be forced to borrow from ALONGS(illegal Money Lenders), for sadly in Malaysia the poor simply cannot borrow money from Banks or even the Government for not financial institutions will give loans to anyone with no security(property or a REGULAR EMPLOYMENT). 

Look at Section 25(2) of the Act that says, '(2) Notwithstanding subsection (1), the Council may, on its own accord or upon the direction of the Government, review the minimum wages order.

Yes, if the Wage Council is not acting - then all it needs is for Prime Minister Anwar Ibrahim to tell them to do the needed to immediately increase the Minimum Wage. But, Anwar and his government did not do this..

So, the Prime Minister who could at any time act causing the MINIMUM WAGE to be increased failed to do so...

Remember, on 1/5/2023(last year), our Prime Minister said, 'The issue of minimum wage will be settled by next month, says Datuk Seri Anwar Ibrahim.' Workers expected an increase of Minimum Wage in a month - but almost 12 months down the road, the Minimum Wage is still not increased. Claps and applause to "FAKE PROMISES" or fake insinuations, but despite increasing cost of living, Anwar failed to INCREASE Minimum Wage sooner...and now his Minister is still talking about reviewing - not INCREASING Minimum Wage. 

Bank Negara Malaysia (BNM) had stated that for Kuala Lumpur, the living wage for a single adult was RM2,700 (in 2018), and for a childless couple, it would be RM4,500. The living wage for a couple with two children would be RM6,500.

One dirty 'strategy' that seems to have been employed by governments of the past is to increase Federal MINIMUM wage across the board, affecting also the small businessman like sellers at fresh markets, small shops that barely survive, fishermen, farmers, etc... By lumping all employers together - there will be massive protest especially from these small employers who can currently hardly survive..

So, I suggest:-

INCREASE MINIMUM WAGE - but not applicable across the Board. For the very small business people, fisherman, farmers, etc that have annual profits LESS Than RM100,000 should be excluded.

For these small employers, maybe a profit sharing scheme with workers should be proposed > sharing say 50% of their profits with their current employees. In this way, these smaller employers may be able to SURVIVE - they simply may not be able to pay any higher wages otherwise. Profit sharing with labour is the way forward.

Another FLAW with Malaysia's Minimum Wage orders of past, although the ACT provides already flexibility..

"b) the coverage of the recommended minimum wages rates according to sectors, types of employment and regional areas;

(c) the non-application of the recommended minimum wages rates and coverage to any sectors, types of employment and regional areas or to any person or class of persons;...(Sec. 22)"

ONE Minimum Wage rate for all. Different Minimum Wage depending on region and having sight of the needed cost of living there...

Well, the cost of living in different places/towns/areas differ - living in a smaller town for example one can rent houses at a much lower rate - this should have been taken into account. So, different MINIMUM WAGE for different areas based on the differing cost of living...

Now, certain work is not attracting Malaysian workers as it is TOUGH, work under the Sun, manual work... THEREFORE a Higher MINIMUM WAGE for these kind of hard work - 3D work (Dirty, Dangerous and Demeaning) - Higher MINIMUM WAGES will attract Malaysian workers - say a Minimum Wage of RM2000 or RM2500? After all there are currently MORE THAN HALF A MILLION Malaysians that are unemployed. 

Malaysia's unemployment rate remained at 3.3% in January 2024, with the number of unemployed persons declining further to 567,300 from 567,800 in December 2023, says the Statistics Department of Malaysia - Star, 8/3/2024
Malaysia must prioritize the employment of Malaysians - before allowing the entry of migrant workers, who may be attractive because migrant workers are easily exploited, cheated, oppressed with little or no means to claim justice in Malaysia as migrant workers are speedily 'forced out' from Malaysia so their claims and cases for justice and human rights cannot start or be continued in Malaysia...' 
Usually, the market determines the WAGES of workers - which means worker wages will increase. This was SABOTAGED when Malaysia made it easy for employers to bring in MIGRANT WORKERS. The effect the wages were kept low - even for Malaysian workers.
As an example, in the construction industry previously, wages were determined according to experience and skill of the worker, and higher skilled worker could get higher wages. With the bringing in of migrant workers, Malaysian workers left as they were unwilling to work for such low wages, as most employers simply paid 'minimum wages'. Some of the Malaysian workers became independent contractors and started taking on small construction work to survive - but then government and some politicians started using only their 'friend' contractors or contractors that were 'politically connected' - and may even Bumiputra contractors had no choice but to shut down operations.
It is sad that for the government, the primary issue for workers had been 'Minimum Wage' - and this is such a narrow thinking. Workers in Malaysia also still do not enjoy 'REGULAR EMPLOYMENT' but only 'contract employment' or 'short-term contract employment'. This state of affairs is very BAD for workers - and they cannot even fight for better wages and better working conditions, or even form Trade Unions. Most who start fighting for worker rights find themselves out of a job. The Human Resource Minister has the power to ensure that 

Section 2A of the Employment Act says '

(1) The Minister may by order prohibit the employment, engagement or contracting of any person or class of persons to carry out work in any occupation in any agricultural or industrial undertaking, constructional work, statutory body, local government authority, trade, business or place of work other than under a contract of service entered into with-

(a) the principal or owner of that agricultural or industrial undertaking, constructional work, trade, business or place of work; or

(b) that statutory body or that authority.

So, simply the Minister can ensure that all workers are working with their REAL employer who has full control of the workplace. End usage of workers of other contractors at the workplace. No more outsourced workers PLEASE.

Likewise the government can put an end of SHORT-TERM Employment Contracts. Now, many employer simply do not renew the short-term employment contract despite there still being work that requires workers. Then, the employer simply hires a NEW worker. Employers must be prevented from doing this, and the law should require employers to use the same worker until the work requiring the worker cease to exist.

If Malaysia insists on REGULAR EMPLOYMENT for all workers - even when the work requiring the worker ends. The law requires the employer to find other work which the worker can do. If there is none, then the employer has the right to RETRENCH, and the worker has the right to receive RETRENCHMENT BENEFITS. Hence, there is really no prejudice to the Employer, but it improves EMPLOYMENT SECURITY for the worker. 

There is so much that the Malaysian government can do for workers if PM Anwar Ibrahim and his government has the intention to help workers.

PM Anwar: Proposal to improve salary of civil servants to be announced at Labour Day gathering

PM Anwar: Proposal to improve salary of civil servants to be announced at Labour Day gathering 
Prime Minister Datuk Seri Anwar Ibrahim chairs the Meeting No 3/2024 of the Public Service Remuneration System (SSPA) Review Main Committee meeting, April 19, 2024. — Picture from X/Anwar Ibrahim

KUALA LUMPUR, April 19 — Proposals for improvement, including efforts to increase the net income rate of civil servants, will be announced by Prime Minister Datuk Seri Anwar Ibrahim at the Labour Day rally to be held later.

Anwar, in his Facebook post, said the Meeting No 3/2024 of the Public Service Remuneration System (SSPA) Review Main Committee, which he chaired today to discuss the salary structure of civil servants further, has almost finalised improvements related to the matter.

Anwar, who is also finance minister, said the matter would then be decided at the Cabinet meeting.

“I wish to emphasise the government’s commitment to resolving efforts to improve the salary structure of civil servants which have been implemented through the SSPA Review, despite the country’s challenging economic situation due to global geopolitical uncertainty.

“The government takes this position and responsibility by considering the pressures of cost of living for civil servants, especially those with low income. Hopefully, this effort will motivate civil servants to increase productivity and provide the best service to the people,” he said.

The prime minister had, when tabling Budget 2024 on October 13 last year, announced that the SSPA would be fully implemented from 2025. — Bernama, Malay Mail, 19/4/2024

Unemployment rate stays at 3.3% for January 2024, says Stats Dept 

Friday, 08 Mar 2024 2:55 PM MYT

PUTRAJAYA: Malaysia’s unemployment rate remained at 3.3% in January 2024, with the number of unemployed persons declining further to 567,300 from 567,800 in December 2023, says the Statistics Department of Malaysia.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said that based on the Labour Force Statistics for January 2024, the country’s labour market sustained its upward trend, in line with the ongoing improvement of the national economic situation and consistent with global economic expansion. 

"Therefore, the labour force in January 2024 saw further enhancement, increasing by 0.1% to 17.05 million persons compared to 17.03 million persons the previous month.

"The labour force participation rate during the month was unchanged at 70.2%, as in the preceding month.

"This positive trend was driven by a continuous increase in the number of employed persons, while the number of unemployed persons declined,” he said in a statement Friday (March 8).

Mohd Uzir said the number of employed persons increased by 0.2% to record 16.48 million persons compared to 16.46 million in December 2023.

Elaborating on the employment situation, he said 75.2% of employed persons in January 2024 were in the employees’ category, while the own-account workers category continued its increasing trend, rising by 0.3% to 3.01 million persons from three million persons in December.

At the same time, Mohd Uzir said the number of employed persons in the service sector remained upward, particularly in the wholesale and retail sector, food and beverage services, and transportation and storage activities.

He added that a similar trend was seen in the manufacturing, construction, mining and quarrying sectors in January 2024, while the number of employed persons in the agriculture sector rebounded compared to the previous month.

Regarding the unemployment situation, he said 79.8% of the total unemployed persons were those who were available for work and were actively seeking jobs, or the actively unemployed, which posted a decrease of 0.2% to 452,500 persons from 453,600 in December.

According to Mohd Uzir, the unemployment rate for youth aged 15 to 24 stood at 10.6% or 306,800 persons, while among youth aged 15 to 30, the rate was 6.7%, with 439,700 unemployed youths.

Meanwhile, Mohd Uzir said the economic situation in Malaysia was steady, with higher domestic demand anticipated due to January’s decline in inflation, a robust job market, and supportive financial positions.

Additionally, the increase in tourism may contribute to economic activities, potentially leading to various businesses and job opportunities.

"Therefore, the labour market in Malaysia is anticipated to improve and remain stable over the next few months, driven by a resilient domestic economy.

"This situation is expected to continue to generate increased demand for employment, thus serving as an important key to sustaining economic stability,” he said. - Bernama, Star, 8/3/2024


Minimum wage to be reviewed this year

KUALA LUMPUR: The government will review the minimum wage this year, taking into account the views of both employers and employees.

Human Resources Minister Steven Sim Chee Keong said the review would be based on the National Wages Consultative Council Act 2011.

"For your information, this year, based on the National Wage Consultative Council Act 2011, the minimum wage rate will be reviewed.

"We will take into account the views of all parties, including employers and employees, and refer to socio-economic reports such as those from Bank Negara."

Sim said this in his winding-up speech on the royal address debate, in a response to Rodiyah Sapiee (Gabungan Parti Sarawak-Batang Sadong).

Rodiyah had raised the issue of reviewing the minimum wage, as suggested by the Bank Negara and the Employees' Provident Fund's literacy initiative, Belanjawanku.

Yesterday, the Malaysian Trades Union Congress (MTUC) demanded the government to review the minimum wage rate, following the Sales and Services Tax (SST) hike.

Its secretary-general Kamarul Baharin Mansor reminded the government that the National Wages Consultative Council Act required a reassessment of the minimum wage every two years.

The last time the government reviewed the minimum wage was in May 2022, increasing it from RM1,200 to RM1,500.

Last year, the then Human Resources Minister V. Sivakumar said the review of minimum wage by the National Wage Consultation Technical Committee was 80 per cent complete.

In January, Economy Minister Rafizi Ramli said he would initiate the process of formulating policies for the 13th Malaysia Plan (13MP) this year, with the Progressive Wage Policy being one of the components in the five-year plan.

He had said the formulation and focus of the policies would be closely related to labour market reforms, and would be developed in collaboration with other ministries involving various components to shape the idea of labour market reforms in the country. - NST, 14/3/2024


PM: Minimum wage issue to be settled by next month

PUTRAJAYA: The issue of minimum wage will be settled by next month, says Datuk Seri Anwar Ibrahim.

The Prime Minister said the implementation of minimum wage is a big challenge.

“We will settle all the uproar pertaining to this issue at the Cabinet meeting next month once and for all,” he said in his speech at the Labour Day celebration here, on Monday (May 1).

On Labour Day last year, the Malaysian Minimum Wages Order 2022 came into effect with the monthly salary of employees fixed at RM1,500.

However, its implementation for companies with fewer than five employees has been postponed from Jan 1 to July 1, this year.

Anwar acknowledged that there is a need to increase the salaries among workers in Malaysia.

The matter should be accepted, and cannot be disputed by any employers, economists or even ministers, he added.

“We do not want anyone to dispute this matter. The government has a responsibility to accept this fact that we have to increase the wages for civil and private sectors.

“There are responsible employers but not all are the same. When an employer records a high revenue of up to RM1bil, they did not raise the employees' wages.

“But there are those who think about the welfare of the workers, their children’s education and providing housing benefits. This is how it should be done,” he said.

Anwar said when he was the finance minister, Tenanga Nasional Bhd was privatised and went on to make huge profits.

He said the company increased its workers' salaries, provided housing benefits to them and set up a university. - Star, 1/5/2023

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