MEB : Minimum wages: speaking up for the blue collars

Ok, there should be a consultative process somewhere, right? I believe the various parties with stronger bargaining position and connection will dominate the discussion (in addition to those I categorised as "Malaysia only pressure group" like Perkasa)

However it is for the men / women in the street that the socialist democrat in me that make me wanna speak up for them. Perhaps some soul from Parti Sosialis Malaysia would like to add on to my comments as well.

page 111 highlighted some potential trade offs:

*Reduced dependence on foreign labour encourages firms to move up the value chain or embrace automation while those that cannot will exit, costing some local jobs

* Flexible hiring and firing reduces entry and exit costs for businesses while wage levels will better reflect skills; but the perception of less job security will irk unions

page 114 got me thinking:-

Some have suggested that a formal minimum wage might be helpful to cushion workers against such shocks or downturns. The NEAC strongly believes this would be a wrong approach and in fact could exacerbate the situation by reducing competitiveness and reducing employment opportunities.

Blue collar workers are at the bottom of the food chain. The booklet correctly stated the potential danger for them - lack of job security. Now giving thumbs down to minimum wage scheme is adding salt to injury, especially when subsidies would be withdrawn gradually as well. Sounds like some people would be pushed to the corner, albeit the booklet did mention a bit about social safety net.

Saying minimum wage would erode competitiveness is not absolutely correct. According to Yazhou Zhoukan (Asian Weekly) 11 April 2010 edition, in 2009 the hourly wage (in US Dollars) for the following countries are as follows:-

Australia 11.16
USA 7.25
South Korea 3.22
Taiwan 2.72
Guangzhou 0.79

Dare we say they are not competitive?

I have seen with my own eyes a factory worker in Seri Damansara get paid RM25 for an 8 hour shift, that make up to RM0.89 ( updated : should be USD0.89 x-rate USD1 = RM3.50, thanks to Mark C & Little Bird. My apologies and lame excuse of a long day in office) per hour. Back in the 1950's Malaysia were much much richer than Taiwan or Korea ravaged by wars then.

Another issue needs considering is that as Malaysia moves (hopefully) towards high income society, rental rates would increase, no thanks to speculators and bidders. According to the magazine quoted above, there are cases in Hong Kong where employers would pass on the negative impact to the workers. Who is there to speak up for them?

One example cited was a restaurant in Hong Kong which rental was HKD90,000 per month. The owner increased it to HKD160,000, forcing the operator to squeeze their workers but ultimately the owner terminated the lease to seek even higher rental. Incidentally, Hong Kong is a place where there is no minimum wage scheme hence the blue collar work force tend to bear the brunt of economic issues whether is inflation or recession.

One alternative is what the labour union scene in America and United Kingdom are going for - Living Wage Campaign.

"Living wage is a term used to describe the minimum hourly wage necessary for shelter (housing and incidentals such as clothing and other basic needs) and nutrition for a person for an extended period of time (lifetime). In developed countries such as the United Kingdom or Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation."

I feel that Malaysian employers can be more creative and diligent in taking care of its workers. We must move from exisiting mindset of giving the bare minimum to foreign workers to developing a social conscious and responsible mindset in looking after our fellow Malaysians. To this end, perhaps something like Triparite Alliance for Fair Employment Practices be established to promote win-win situation for both employers and employees - a happy employee is a productive employee. (Of course the current work ethics and attitude of the Malaysian workers can be another topic itself).

I strongly believe it is the government's morale and mandatory responsibility to enable its citizens to live in safety and with dignity.

For decades, the declining health services (how many more negligent and cool heart cases resulting in deaths and permanent disabilities we still have to bear before a "hard working" Health Minister will look into this matter SERIOUSLY), government wastages, increased cost of living via privatisation and rent seeking models etc.

Time for change! Time for tax payers and citizens to say "We deserve better. We have rights. A minister is a public servant, not some feudal honcho."


  1. We are surely FAIL~! in moving to a high and secure income country...

  2. how do you calculate RM0.89 an hour, if the rate is RM25 per 8hour?

  3. These are the top 10 countries on the Global Competitiveness Index for 2009-2010 Report.

    Switzerland 5.60
    United States 5.59
    Singapore 5.55
    Sweden 5.51
    Denmark 5.46
    Finland 5.43
    Germany 5.37
    Japan 5.37
    Canada 5.33
    Netherlands 5.32

    Of these 10, perhaps only Singapore has no minimum wage law. Perhaps the MEB/NEAC panel of experts would like to empirically justify their dogmatic pronouncement that "minimum wage (reduces) competitiveness" in the next installment of MEB.

  4. comments in Malaysia Today

    written by storm62, April 09, 2010 16:08:02

    He pegged the USD at 3.5 and he forgot the convert to $ sign and he also forgot about the overtime, some poor fellows have to work 12 hours a day and THAT i've seen with my OWN eyes too.
    +0 ...
    written by Up Yours!, April 09, 2010 15:07:10

    You are right Littlebird, I need his brains too. But the debate here should not be on who gets paid how much or how little. It should have been about quantifying the quality of work delivered. If you were to measure the output of a production worker in Guangzhou and here, top it up with the lower wage there, I think our blue collar workforce here already is already enjoying a fantastic deal, no?
    +1 ...
    written by Littlebird, April 09, 2010 10:42:32

    Mark C, I think you are correct. I guess I need his brains too
    +0 ...
    written by temenggong, April 09, 2010 10:33:01

    If Najib implements the minimum wage of RM 1,500, then it will truly be historic, revolutionary and reformatory. But I shall wait and see how, if ever, it is implemented. It cannot be successful without repatriating one-third of the foreign labour.
    +1 ...
    written by syd, April 09, 2010 10:26:30

    Unfortunately, lowly paid Malaysian does not copntribute to the govenrment's coffers as much as lowly paid immigrant in terms of levy and other indirect taxes.
    Notice how easy and cheap it is to set up a restaurant or factory in Malaysia as compared to australia.
    That is one reason why many malaysian, after working for big shot banks overseas etc, finally return home and open their own businesses.
    Berjaya Corp offers RM1000k +/month for workers in their 7-11 outlet. How to survive on this meagre salary unless you stay with your parents, walk to work and eat with your parents. Only then it is worth it.
    +2 ...
    written by Mark C, April 09, 2010 10:05:37

    written by Littlebird, April 09, 2010 09:33:56

    RM25 for an 8 hour shift, that make up to RM0.89 per hour.

    My calculator says 25 divide 8 is RM3.125. I need your eyes.

    he's probably coverted the 3.125 rm to 0.89 USD/ hr.....
    +6 ...
    written by Ken Liew, April 09, 2010 10:01:07

    As "Bones" series teach us, I've seen people kill for less.

    Make up = whats left of the money for the day.

    If you dont eat dont drive, and dont drink at all... tat will be helpfull..... plus, when sick try 1Malaysia Clinik....
    +1 ...
    written by Littlebird, April 09, 2010 09:33:56

    RM25 for an 8 hour shift, that make up to RM0.89 per hour.

    My calculator says 25 divide 8 is RM3.125. I need your eyes.

  5. nice blog.. have a view of my blog when free.. .. do leave me some comment / guide if can.. if interested can follow my blog...