Minimum wage will prove early test for new Malaysian leader

Union urges members to give government time – but Mahathir will feel pressure to tackle cost of living

Malaysia’s largest trade union has said the country’s new government will need time to fully assume power before it can address a range of workforce-related issues including the rising cost of living, job security and a potential increase in the minimum wage.

In a statement, the Malaysian Trade Union Congress (MTUC) called on 14m workers to give the victorious Pakatan Harapan coalition time to order its priorities following last week’s elections.

“Let us not pressure them unnecessarily at this juncture,” the union said. “They have to study and review the policies and practices which [are] affecting workers’ livelihood.”

Dr Mahathir Mohamad, 92, seized power last week, gaining a clear majority over incumbent prime minister Najib Razak’s Barasin Nasional (BN) party in an election which surprised observers.

Allegations of corruption against Razak were seen as one of the key issues that swung the electorate behind Mahathir, who will be serving his second term as prime minister. But Razak may also have suffered a backlash against a spiralling cost of living as Malaysia’s economy undergoes a rapid transformation.

MTUC secretary general J Solomon met with a newly established ‘Team of Eminent Persons’ to provide details of worker-related issues raised with the previous government.

The cost of living, job security and the inability to sufficiently upskill workers were among the priorities raised, he said.

“As advisors to the government and programmes to help Pakatan Harapan achieve its election promises in the first 100 days, [MTUC chairman] Tun Daim and his team have been working hard since their appointment,” Solomon said.

“It is very reassuring to see the speed and commitment at which Tun Daim and his team are working to collect inputs of issues that are affecting workers.”

Razak had promised a new higher minimum wage, paternity leave and other benefits if BN remained in power after the general election on 9 May.

During the 2018 Workers’ Day rally, Najib said the government would provide the MTUC with an RM3m (US$758,000) special grant to distribute this year and promised to increase the minimum wage from RM920 to RM1,000 (US$232-253), depending on location, to a new level which would have been announced later this year.

He added that the BN would propose an initiative of mandatory paternity leave of a minimum three days for husbands of private sector employees in “an effort to nurture wholesome families”.

Mahathir was vaguer in his promises in this area. During his campaign, he suggested increasing wages across all sectors, in order to help workers cope with the cost of living.

“If you want to increase wages, it has to be across the board. This includes minimum wage, and those who earn more than the minimum wage,” Mahathir said in a Facebook Live session on 7 March. But he cautioned that rises in wages had to be carefully calibrated not to further stoke inflation.

“When wages rise, so will the cost of living. However, this can be overcome if our productivity rises as well, to the same tune as the rise of wages,” Mahathir added.

The MTUC has proposed a minimum wage of RM1,800 (US$455) for the Peninsular, Sabah, Sarawak and Labuan regions.

Bank Negara suggested a new ‘living wage’ in its 2017 Annual Report that would enable households to afford a ‘minimal acceptable’ living standard.

In 2016, half of Malaysian workers earned less than the national median of RM1,703 (US$430), according to the report.

And Solomon pointed out in a statement that a minimum wage revision was scheduled to take place in July and should therefore not be seen as a “gift” to the electorate.

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