Lower income groups face slow wage growth

PUTRAJAYA: Allowing market forces to determine wage growth in the country has worked against the lower income groups, according to government studies and the World Bank, said Human Resources Minister Datuk Dr S. Subramaniam.

Dr Subramaniam said 40% of the households at the bottom of the wage scale had experienced the slowest growth with an average income of less than RM1,500 per month in 2008.

He noted that the higher income groups seemed to be getting salary increments to keep up with the rise in the cost of living.

He said a study carried out by the World Bank found that the wage trend in Malaysia only recorded a 2.6% annual growth over the past 10 years, which was lower than the rise in the cost of living during the same period.

A study by the Human Resources Ministry in 2009 on the National Employment Return showed that 33.8% of the 1.3 million workers covered in the study earned less than RM700, and this put them below the poverty line of RM720 per month.

In many instances, employers did not pay for skills by opting for unskilled foreign workers and this had also dampened wage growth, he told a press conference here yesterday.

The minister had earlier addressed the Minimum Wage Laboratory that saw the participation of members of the senate and Parliament, state executive council members as well as representatives from the World Bank, various government agencies, employers, trade unions and non-governmental organisations.

The findings of the laboratory, he said, would also be crucial in determining the scope and direction for the National Wage Consultative Council that would be set up under the National Minimum Wages Act 2011, to be tabled in the March meeting of Parliament.