Malaysia announces new minimum-wage policy
Baku, May 1 (AZERTAC). Prime Minister Najib Razak has announced a long-awaited minimum-wage policy for Malaysia, in a move that is set to benefit 3.2 million of the country`s lowest-paid workers — including Indonesian maids — while potentially boosting the ruling Barisan Nasional`s (BN) chances at the next general election.
These workers, who make up a quarter of Malaysia`s workforce, currently earn less than 700 Malaysian ringgits ($231) a month and live below the poverty line. They include security guards, as well as construction and plantation workers.
Datuk Seri Najib said yesterday, in a speech ahead of May Day, that the minimum wage will be set at $297 per month for workers in Peninsular Malaysia and $264 for those in East Malaysia. It excludes those in the domestic service sector, such as maids. Malaysia has been negotiating minimum wages separately for maids, most notably with Indonesia.
The new wages will come into effect in six months. They have been in the works since 2009, when Najib unveiled plans to move Malaysia`s economy away from a low-cost model and rely less on cheap labor.
“From a social perspective, this is the right thing to do, so that the most vulnerable groups aren`t taken advantage of,” said Yeah Kim Leng, chief economist of Malaysian rating company RAM Holdings. “It can also serve as a way of pressuring industries to restructure and go up the value chain.”
Considering the relatively small increment, Yeah believed there will not be a huge jolt to the system, though labor-intensive companies may be more affected.
Neighboring Indonesia, Thailand and Vietnam are among countries that have a minimum wage, which varies by area and sector. In Bangkok, the minimum wage is 300 Thai baht $9.75 a day, while in Jakarta, it is 1.29 million rupiah ($143) a month. Singapore does not set a minimum wage.
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