‘Min­i­mum wage in­crease needs more study’

The Borneo Post - - HOME - By Karen Bong re­porters@the­bor­neo­post.com

KUCH­ING: The Sarawak Oil Palm Plan­ta­tion Own­ers As­so­ci­a­tion (Sop­poa) has ex­pressed sup­port for the pro­posed new min­i­mum wage struc­ture but hopes the Min­istry of Hu­man Re­sources will con­sider a few point­ers when a re­view is due soon.

Sop­poa, in a press state­ment yes­ter­day, said the as­so­ci­a­tion is not against any re­form of the min­i­mum wage struc­ture set by the govern­ment as it was done with good in­ten­tions and for the progress of the coun­try.

“How­ever, a fun­da­men­tal con­sid­er­a­tion that the Na­tional Wage Con­sul­ta­tive Coun­cil must put se­ri­ous thoughts to is that of the pro­duc­tiv­ity in line with the in­crease in wage struc­ture,” the state­ment said.

“It is im­prac­ti­cal for any coun­try to just in­crease wages with­out hav­ing some cor­re­spond­ing in­crease in pro­duc­tiv­ity as this will not im­prove the na­tion’s growth but in­stead pulls down the over­all ef­fi­ciency of the coun­try,” it added.

The state­ment came fol­low­ing an­nounce­ment by the Hu­man Re­source Min­is­ter M. Ku­lasegaran re­cent­ly­on­re­view­ingth­em­i­ni­mum wage by Au­gust 2018.

Ku­lasegaran men­tioned that the new in­crease will not be as high as that promised in the Pakatan Hara­pan’s elec­tion man­i­festo (which was RM1,500) apart from stan­dar­d­is­ing min­i­mum wage

How­ever, a fun­da­men­tal con­sid­er­a­tion that the Na­tional Wage Con­sul­ta­tive Coun­cil must put se­ri­ous thoughts to is that of the pro­duc­tiv­ity in line with the in­crease in wage struc­ture.

across the whole coun­try.

Cur­rently, the min­i­mum wage for Penin­su­lar Malaysia is RM1,000 while for Sabah and Sarawak is RM 920.

A num­ber of oil pro­duc­ing na­tions, Sop­poa ob­served, have in the past in­creased their work­ers’ wages with­out see­ing any in­crease in pro­duc­tiv­ity which even­tu­ally led to the demise of their economies and huge in­fla­tion re­sult­ing in poverty.

“Such a sce­nario must not oc­cur in Malaysia and so it is im­per­a­tive that pro­duc­tiv­ity in­creases must be in tan­dem with wage in­creases. Only in this way will the na­tion be able to progress in a mean­ing­ful and pro­duc­tive cy­cle of in­creas­ing pro­duc­tiv­ity with in­creas­ing wages,” it re­minded.

Another con­sid­er­a­tion with re­gards to the pro­posed in­crease in wages, Sop­poa elab­o­rated, was the pur­chas­ing power of the peo­ple.

“In­crease in wages for the work­ers that re­sults in the in­fla­tion of prices for goods and ser­vices will be detri­men­tal to the econ­omy of the coun­try, a sce­nario that also should not hap­pen here.

“The govern­ment has to en­sure that there will not be a mad rush by pro­duc­ers of goods and ser­vices to cor­re­spond­ingly in­crease their prices when the new wage struc­ture had been im­ple­mented as then the pur­chas­ing power of the peo­ple will not in­crease. Worse, it could even be neg­a­tive should the in­crease in prices of goods and ser­vices out­pace the in­crease of wages,” it warned.

Sop­poa urged the min­istry to care­fully study the pro­posed in­crease in min­i­mum wages and im­pacts on SMEs (small and medium en­ter­prises) to en­sure that these will not be neg­a­tively af­fected by the pro­posed in­crease in min­i­mum wages.

“As such, Sop­poa would like to cau­tion the min­istry on these con­cerns and to ad­dress these is­sues as part and par­cel of the pro­posed wage in­crease struc­ture.”

Like all con­cerned par­ties in the coun­try, Sop­poa re­quested that proper con­sul­ta­tive di­a­logues be car­ried out with all stake­hold­ers prior to any de­ci­sion on the pro­posed wage in­crease.

This is par­tic­u­larly so for plan­ta­tion sec­tor where more than 30 per cent of the cost are made up of wages in or­der not to have a neg­a­tive im­pact on the com­pet­i­tive­ness of palm oil in the in­ter­na­tional oil and fats mar­ket.

Sop­poa state­ment

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