The growth of wages and salaries in the country is currently hampered by the global economic instability
by SHAHEERA AZNAM SHAH/ pic by BLOOMBERG
MALAYSIA’S target to become a high-income nation would depend much on the private sector’s willingness and capacity to adopt national policies.
Institute of Labour Market Information and Analysis consultant Chang Yii Tan said the growth of wages and salaries in the country is currently hampered by the global economic instability.
“Whether we are going to reach the high-income status or not, it will depend on the type of policies that the companies will be able to implement.
“The ministry has been continuously engaging with public and private universities to improve the quality of future local workforce through the Technical and Vocational Education and Training (TVET) education, which would enhance greater sharing of economic output.
“We are getting there, but we are not marching as fast. It’s due to some of the global headwinds,” he said at the National Wage Index Malaysia (NWI) press conference in Putrajaya yesterday.
Chang added that employers are required to retain the workforce as it is being measured as one of the prime economic foundations for a country that is striving to achieve that high-income status.
“We believe the employers have to retain their talents, as it is the most important part of the economic foundation. We are measuring how well our workers are being paid. In particular, we want to know whether the change increases overtime.
“The business environment is very challenging as the trade war is still ongoing, and the companies are facing the fourth industrial revolution pressure,” he said.
Last year, Malaysia’s gross national income stood at US$10,460 (RM43,827), which was US$1,915 below the benchmark of US$12,375 set by the World Bank in defining a high-income country status.
Chang said the income growth in Malaysia is comparatively higher than in other countries within the Asean region.
“If we compare between Asean countries, Singapore in particular, they are growing between 2% and 2.3%.
“Malaysia’s growth is somewhat higher. Maybe the level of Singaporeans’ income is higher, but it has been increasing at a slower pace,” he said.
According to the latest NWI data, the basic wages of Malaysians increase 5.3% year-on-year (YoY) in the fourth quarter of 2018 (4Q18).
Wages in Peninsular Malaysia grew 5.9%, while Sabah and Sarawak saw a 1.9% and 4.2% increase respectively.
Over the period of 10 consecutive quarters, the basic wages in Malaysia grew by 10.6% between 3Q16 and 4Q18.
Measuring the income growth in the main sectors in the last 10 consecutive quarters, the report showed that the service sector charting the list with an increase of 12.2% since 3Q16, followed by the public sector with 11.2%, and mining and quarrying sector with 10.4%.
Income in the construction and plantation sectors recorded the least growth with 5.8% and 1.8% respectively.
In comparison to countries with constructed wage indices, Malaysia’s income growth surpassed the US (3.2%) and Australia (2.3%), while Iceland led with a growth of 6.1% YoY in 4Q18.