Govt introduces unique progressive wage policy rooted in Madani economy

BANGI: The country's Progressive Wage Policy that is being developed does not follow the model developed by other countries but according to the components of the Madani Economy.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the policy would raise the compensation of employees, which is currently at 32.4 per cent of the Gross Domestic Product (GDP).

"Everyone has a role in producing a comprehensive policy for this purpose. That includes the industry and policymakers, including academicians, experts and researchers.

"The involvement of all parties is being implemented by the government, with the hope that this policy can be implemented more comprehensively.

"The policy paper has been approved by the National Economic Action Council (MTEN), and it is to be presented in Parliament," he said during a seminar on 'Dasar Gaji Minimum Ke Arah Gaji Progresif dan Ekonomi Madani' held at Universiti Kebangsaan Malaysia's Social Sciences and Humanities Faculty.

Uzir was one of the panellists along with the University of Cyberjaya chancellor, Professor Emeritus Tan Sri Anuwar Ali, former Malaysian Institute of Economic Research (MIER) chief executive Professor Emeritus Datuk Dr Zakariah Abdul Rashid, Workers Institute of Empowerment Selangor chairman Syed Shahir Syed Mohamud and Persatuan Sains Sosial Malaysia (PSSM) special advisor Prof Emeritus Datuk Dr Abdul Rahman Embong.

The moderator of the seminar was PSSM presdient Professor Dr Sity Daud.

Uzir said the progressive wage policy is being done collectively towards better developing the labour market following the implementation of the country's Minimum Wage Policy (MWP).

"The MWP implemented by the country has a positive effect on unskilled workers, but not for semi-skilled and skilled workers.

"Therefore, this progressive wage policy is necessary, and it is expected to coordinate employees' wages in a structured and gradual manner."

However, Anuwar, on the contrary, believed that it was not the time yet for the progressive wage to be given focus.

He said this was due to unresolved issues for the minimum wage, especially for the cohort of wages between RM1,600 and RM1,800.

"The increase in wage for this cohort is not as expected. If the minimum wage increases by 20 per cent, those earning more than RM1,500 to RM1,800 should also get a similar increase.

"There are still many things that we must thoroughly study; the same goes with the progressive wage model.

"I believe that we have to give attention to the minimum wage, those earning the minimum wage, the employer's ability to implement the minimum wage, as well as the ability to pay the cohort that earns above the minimum wage."

Anuwar, a committee member of the National Wage Consultative Council (NWCC), said another issue that must be scrutinised was the starting salary for graduates.

"Some employers used the minimum wage as a benchmark to set the starting pay for the group."

Zakariah said he believed that the government intervention regarding wages was counter-productive.

"The minimum wage was an intervention (from the government), and the progressive wage is another intervention (from the government).

"You cannot expect interventions to solve everything. When the minimum wage was enforced, but we did not intervene in the other wage band, it led to wage centralisation, causing low wages.

"The kind of intervention that we need is the productivity-linked wage system (PLWS), but it is voluntary and ineffective.

"To solve the problems, if possible, do away with all kinds of interventions," he said.

Instead, Zakariah, a committee member of NWCC, believed that one should revive a more efficient labour market by encouraging trade unions.

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