Higher wages a measure of progress
THE recent remarks by the EPF that higher wages should be considered for workers in Malaysia is a step in the right direction. It also warned that increasing workers’ EPF contributions is not the best way for the nation to move forward, as the current percentage is among the highest in comparison to other countries. Instead, steps should be taken to ensure that wages are raised in line with the aspirations of a country aiming for developed nation status.
Increasing the EPF contribution is definitely the easiest way to raise savings, but it will not contribute to the progress of the nation over time. In fact, there is even the danger that investors will shy away for fear that employers have to pay a higher EPF rate, rendering the business environment unprofitable in the long term.
Previously, Malaysia wanted to keep wages low to attract investors but the nation has progressed beyond the low wage status already. Today, the country is a major exporter of oil, palm oil, timber and other manufactured goods, and can command relatively good prices due to the quality of these products.
As rightly pointed out by NGOs like the Malaysian Trades Union Congress, the usual excuse from employers to keep wages low is a gimmick to ensure higher profitability. Majority of big businesses employing a large number of foreign workers enjoy huge profits but pay minimum wages.
The current way of doing business in Malaysia must be reformed if we are not to be left behind by our regional neighbours who are becoming more competitive.
These reforms can only be constructively introduced through discussions between employers and unions.
For Malaysia to progress, the government must take the following steps: improve the local economy by reducing tolls and petrol prices, remove uncompetitive monopolies and encourage more downstream processing of our commodities.
These are easily within the means of the government if it has the nation’s wellbeing in mind.
Malaysia will ultimately fail to compete directly with other countries in the IT field, as our present education system is not on par with them.
Hence, we must excel in what we have currently and move on from there. When our exporting economy picks up with added manufacturing, it will definitely result in higher wages as well as greater automation, which together will bring greater progress to our country.
Malaysia certainly needs to have a plan for the future, otherwise it will face a bleak winter while other nations ride the wave of success due to their better education system and policies favouring economic development in a competitive business environment.