No plan to introduce ‘living wage’ anytime soon


The government has no immediate plan to introduce the living wage concept — which determines the minimum income necessary for workers to meet basic needs and decent standard of living — that was mooted by Bank Negara Malaysia (BNM) in its annual report last year.

Human Resources Minister M Kulasegaran (picture) said the Pakatan Harapan administration does not intend to introduce the concept in the near future as it is not a statutory requirement like the minimum wage.

He said the policy on minimum wage is carried out to establish floor wages or basic salaries — which are typically lower than the living wage — to meet the basic needs of employees.

However, Kulasegaran said the government is always open to suggestions and the National Salary Consultative Council will look into the concept to ensure that it is applicable and beneficial to the people and the local economy as a whole.

He was responding in a written reply to a query by Khoo Poay Tiong (Pakatan Harapan-Kota Melaka) who asked if the government had any considerations to implement the living wage concept in Malaysia.

The central bank defines a living wage as the minimum income needed not just to afford necessities, but also allows a household to participate in the society, the opportunity for personal and family development and freedom over severe financial stress.

BNM said the living wage concept can be used to guide policymakers and employers on what is acceptable as minimum living standards.

According to BNM’s 2017 Annual Report, the living wage in Kuala Lumpur (KL) ranges from RM2,700 a month for an individual, to RM6,500 for a couple with two children.

Based on this scale, the study found that up to 27% of KL households are living below the living wage and they are mostly secondary school graduates with low-to-mid-skilled jobs.

The government had standardised the minimum wage for the private sector across the country as of Jan 1, 2019.

The new minimum wage is set at RM1,100 per month — about RM5.29 per hour — up from RM1,000 for the peninsula and RM920 for East Malaysia.

As part of efforts to fulfil its election promise, the government has pledged to work towards a minimum wage of RM1,500 in the next five years.

Kulasegaran also said the government’s consideration to enforce a sectoral-based minimum wage policy is in response to complaints made by employers.

However, experts believe a move to set sectoral wages will be complicated.