by AUFA MARDHIAH / pic TMR FILE

ECONOMY Minister Mohd Rafizi Ramli (picture) set to table the progressive wage policy in an Economic White Paper in Parliament this Thursday.

He said  the government’s commitment to complement the existing minimum wage policy with a new directive and to boost salaries for groups not covered by the minimum wage, addressing the wage gap and ensuring fair compensation across various sectors. 

He stressed that such a policy cannot rely solely on employer regulations and requires a comprehensive approach eagerly awaited by both workers and employers.

“On the labour market front, the Progressive Wage Policy will be tabled to parliament in three  days, as we look to fix the systemic issue of our low wages. 

“It remains shocking to me that our median wage is only RM11 above the poverty line,” he said in his keynote address for the National Economy Outlook Conference at the Malaysian Institute of Economic Research (MIER) today.

Rafizi highlighted the success of the minimum wage implementation in raising the income of the lowest-paid workers. However, he acknowledged a unique situation emerging, posing challenges for the wages of young and semi-skilled workers.

Moreover, Rafizi stated that the progressive wage model is not only a mechanism for uplifting worker income but also a catalyst for economic growth. Recognizing the link between higher wages, increased productivity, motivation, and efficient operations, the progressive wage model is viewed as a strategy addressing the dual objectives of fair compensation and economic advancement.

“The government’s perspective is that such a policy cannot solely rely on employer regulations and necessitates a comprehensive approach eagerly awaited by both workers and employers alike.

“Furthermore, the government believes that the progressive wage model serves not only as a mechanism for uplifting worker income but also as a catalyst for economic growth. 

“Recognising that higher wages contribute to increased productivity, motivation and the need for efficient operations, the progressive wage model is viewed as a strategy that simultaneously addresses the objectives of fair compensation and economic advancement,” Rafizi told reporters after the ceremony.

With a robust foundation laid by the structural economic reforms initiated in 2023, Rafizi said Malaysia aims to position itself advantageously for the anticipated improved global economic conditions in 2024 and beyond. 

He also announced a shift from policy curation to implementation, which include the establishment of National Utilities Database (PADU) in January, providing granular data for targeted programs such as subsidy rationalisation or social welfare reform. 

Additionally, the roll-out of the RON95 subsidy program in the second half of 2024 is expected, as Rafizi emphasised the need for a more sustainable and equitable model for blanket fuel subsidies.

“The culmination of these difficult structural reforms, an easing macroeconomic environment and a stronger fiscal base will ensure Malaysia is in good stead to achieve next year’s expected 5% growth rate. However, there is one missing ingredient: economic statesmanship,” Rafizi further added.