It was not a surprise to many Malaysians when articles written by multiple media platforms started listing down Malaysian employers to be among the stingiest in Southeast Asia. Malaysians have faced low wages for decades whilst minimum wage is still below the poverty line income, which was revised in 2020, making a big jump from RM980 to RM2,208 per household (approximately $224 to $505).
In February 2022, Human Resources Minister Datuk Seri M. Saravanan announced that the minimum wage in Malaysia is to be increased by the end of the year with a rise of RM300 (approximately $69), from RM1,200 (approximately $275) to RM1,500 (approximately $343, which was confirmed by the Prime Minister starting in May).
Tan Sri Soh Thian Lai, President of Federation of Malaysian Manufacturers (FMM) expressed FMM’s concern saying “the proposal to increase the minimum wage by 25% to RM1,500 would have an undesirable impact on the economy especially in the present circumstances as the wage adjustments would precipitate increases at higher wage levels as well”. He further suggested that the minimum wage increase should be gradual and that it should also be accompanied with a productivity increase because any “drastic” change in wages could adversely affect the overall cost and competitiveness of businesses.
The Center for Market Education (CME) had also issued a statement opposing the minimum wage increase, saying that the increase is not the answer to solving problems such as inflation. Furthermore, the CME highlighted that most of those who are paid minimum wage are low-skilled workers who simply can’t demand higher pay because of their skills and productivity. CME’s statement perpetuates the idea that workers are paid low wages most probably because they are low-skilled and immigrants.
The irony in these statements is that for decades employees in Malaysia have been underpaid despite the large gap in the productivity to wage ratio, as stated by Bank Negara Malaysia in 2019, which revealed that, as compared to regional peers such as Singapore and South Korea, Malaysian employees are getting paid the lowest for the same level of productivity.
Additionally, the CME also mentioned that the cause of low wages, especially among fresh graduates, is linked to mass tertiary education, making the value of degrees earned by most students to shrink. To resolve this, the CME proposed to allow secondary education to be a qualifying standard for administrative and technical jobs.
This statement further promotes the income disparity that is already an existing problem in Malaysia. This suggestion would only help the elites as it will further strengthen the systems that help to worsen it, leaving middle and lower-income families behind via the poverty cycle, of which education is a key factor.
The concerns expressed by organisations such as FMM and CME are arguably biased towards the employers’ point of view. This bias does not show the importance of increasing the minimum wage for the people’s overall welfare and instead sees this increase in wages as a burden for employers. Given the pandemic, Malaysia as a whole has come to a point where an increase in the minimum wage is more than necessary, especially considering the revised poverty line income being RM2,208 (approximately $505), which is significantly above the current minimum wage.
LIVING WAGES FOR INTERNS & TRAINEES
Aside from the low wages for full time workers, trainees and interns face a situation in which they are either highly underpaid or simply not paid at all, which has become the general rule among several companies and organisations. NGOs and intergovernmental organisations such as the United Nations (UN), still practise the culture of underpaying or not paying their interns despite its mindset of being pro-human rights.
Abdullah, a 23-year-old intern at the United Nations Development Programs (UNDP), talked about his experience interning there with an allowance of RM637 (approximately $146) per month, which is much lower than the amounts paid by other local organisations. He recalls his earlier internships which paid RM1,000 (approximately $229) (A. Nishad, personal communication, March 2022).
He says “working with an organisation that champions human rights and human development, I assumed that they would be paying the same as I was paid before in my previous internships considering the long process of applying and getting the role alone. On top of this, the pay given to me does not reflect my job responsibilities which have been relatively similar to my previous roles” (A. Nishad, personal communication, March 2022).
Previously in 2020, the UN received backlash after they were exposed for not paying their interns on Twitter, which led to allegations that their internship programs are made for the rich who can afford to work full time for free. As seen in the job vacancy post, it stated that “the internship is UNPAID and full time” with a long list of responsibilities expected from the interns. This clearly shows the exploitation of free labour by a large organisation that is supposed to go against it.
UNIVERSAL BASIC INCOME
Every individual deserves to get paid. Universal Basic Income (UBI) is not a new idea, but is currently gaining more support after the pandemic, and it is time for the government of Malaysia to adopt it.
In 2020, when countries worldwide were still trying to control the effects of COVID-19, the Malaysian government gave out monetary aid through a programme called Bantuan Prihatin Rakyat. This programme was set up to ease the burden of the people who had lost jobs, faced salary cuts, and other similar situations due to the pandemic. As expected, this was not enough to help the people and businesses to recover from the damage of being under lockdown.
Although there are criticisms that UBI would not be sustainable for the government to implement, or that it would create a reason for people to not want to work, causing economic productivity to fall, there is evidence that proves otherwise from other countries that give out monetary aid similar to the concept of UBI. Further, the basic income given would just be enough to cover the gaps in the people’s day-to-day living costs. The aforementioned evidence can be seen in the case of Alaska, which has been providing its citizens with annual checks ranging from $1,000 to $2,000 since 1982.
Now is just the right time for the government to start investing in the people to help lower income families in trying to get out of poverty, while simultaneously helping revive the country’s economy through spending power.
Ruhaishah is a Governance & Public Policy graduate with an interest in human rights and politics. She uses writing as a means to express herself and have an understanding of the world.