PUTRAJAYA, Aug 4 — Employers shouldn’t use the minimum wage of RM1,500 as a reference to set fresh graduates’ salaries, said Economy Ministry Rafizi Ramli.
“If the minimum wage exists, then the starting wage for a degree (holder) should be higher because minimum wage is for unskilled workers, not skilled workers.
“However, preliminary findings of wage statistics show that the minimum wage is being used as the benchmark for pay (salaries), especially for fresh graduates and young skilled workers.
“This is a phenomenon that requires an urgent policy for us to rectify the situation,” he told the media after the launch of the Employee Wages Statistics (Formal Sector) Report for the first quarter of 2023 here today.
The report showed 10.2 per cent of the 6.45 million formal workers were paid wages below RM1,500 in March.
Rafizi said the majority of Malaysians were paid low wages, whereby 82 per cent of the 6.45 million formal workers were paid less than RM5,000 a month and 35 per cent of that number were paid RM2,000 and below in March 2023.
“With the publication of this report, we know we have salary issues. It is not just talk; now it can be confirmed by data that over six million workers (are affected), so the government will focus on this matter,” he said.
He said the report revealed the median wages for formal workers in March stood at RM2,600, which is not far from the poverty line of RM2,589.
“We do have a big problem. This is what restructuring is all about. It’s not just about getting investment and growth, (but) it is making sure whatever growth and investment that we plan or generate should be reflected in the daily livelihoods of our workforce,” he said.
Rafizi said the progressive wage model, which will be presented to the National Economic Action Council on Monday, will be an important basis for the government to deal with wage-related issues.
“I know it is a big challenge for employers, but we have to find a way for us to resolve these issues,” said Rafizi, who is confident the progressive wage model can be implemented practically with the support of employers.
“We have held engagement sessions with the employer group, so we have spoken to them and gotten their views. So far, small and medium companies with fewer than 50 employees have been informed,” he said.
— Bernama
