DAP urges the federal government to introduce a two-tier system of a compulsory minimum wage and fair wage

In conjunction with Labour Day 2010, DAP urges the federal government to introduce a two-tier system of a compulsory minimum wage to ensure all our workers would earn basic salary above the poverty level and an aspirational fair wage.

Minimum wage

The absolute poverty rate in Malaysia is at 3.6 per cent, yet there are reports that some workers are still earning basic wages below the poverty line. Since the minimum wage is the lowest salary level that employers are legally bound to pay, I would like to propose a minimum monthly wage based on the poverty line of RM720 in Peninsular Malaysia, RM960 in Sabah and RM830 in Sarawak.

Although it may not sound much to some people, it must be understood that are still a lot of workers earning less than RM720 a month in this country. The minimum wage must be based on poverty level, and as such, different basic wages will paid in different states, according to the poverty line, as long as it is above the level.

Employers should not be alarmed by this proposal as this would only benefit them in the long run. The minimum wage will alleviate problems faced by their respective workers from the pressure of the ever-increasing costs of living such as prices of food, petrol, public transportation, lodging and other bills to be paid monthly. Such a personal pressure can affect a worker’s productivity and creativity.

Under the minimum wage law, workers will be secured as they no longer have to suffer living conditions forced upon them by having to accept pay below the poverty level. This in turn could encourage workers to work harder and smarter to increase their productivity, hence pushing companies’ productivity to a higher level.

The government has already fixed the minimum pension of RM720 a month for its retired civil servants. The government has even set the minimum wage of RM750 a month for RELA members who worked as part-time security guards.

Therefore, there is no reason why the government cannot fix the basic minimum wage of RM750 a month to all workers in Peninsular Malaysia and RM960 for Sabah and RM830 for Sarawak.

This will certainly help the workers in rural areas and those in the outskirts of major cities and towns.

Fair wage

A fair wage of RM1,500 monthly would be necessary, especially for those in the urban areas. However a fair wage would not be compulsory but should be aspired to according to a time frame that would be worked out between employers and employees after consultations to attain this level.

Although urban poverty has been defined as a family income of below RM3,000 a month, the proposed basic RM1,500 is meant to alleviate those who are currently paid less than RM1,500. As most urban families have husband-and-wife working, this will enable a family to earn more than RM3,000 a month, a first step to get out from the lower income trap.

This will also reduce our dependency on foreign labour because a fair wage could attract more Malaysians to join the work force rather than leaving the country, causing labour shortage in our country.

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