What Election Promises Will Be Made On The Minimum Wage?

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Since the Minimum Wage Order was enacted in 2012, the federal government has reviewed the minimal wage with recommendation from the NWCC at the least as soon as each two years, as required by the NWCC Act 2011.

Between 2012 to 2020, the minimal wage has been raised from RM900 a month for West Malaysia and RM800 for East Malaysia to RM1,200 a month for 56 municipal council areas and RM1,100 a month for different areas.

That’s a rise of RM300 over a interval of almost a decade, which works out to a median of three.3% a yr, or round a median of 1.5% yearly after accounting for inflation. For reference, the typical development of Malaysia’s nominal GDP is round 6.4% throughout the identical interval (excluding 2020) or 5.1% in actual phrases.

It is just not fully clear what actually determines the extent of the minimal wage. This is maybe rooted within the very foundations of our minimal wage regulation which has two conflicting aims: firstly to make sure staff can meet primary wants and secondly, to supply a conducive surroundings for industrial manufacturing.

The first goal, judging by present benchmarks, appears to be of decrease precedence. Take the Klang Valley. The present minimal wage of RM1,200 is way decrease than numerous ‘primary wants’ estimates, be it BNM‘s residing wage estimate of RM2,700 for singles, or SWRC‘s reference finances stage of RM1,870 for single public transport customers.

There is a acknowledged minimal wage formula on the NWCC web site, which includes related indicators such because the nationwide poverty line, median earnings, inflation price, and extra. However, judging by the quantum of minimal wage will increase over the previous decade and the hole between the minimal wage and the residing wage, it’s exhausting to say with confidence that the precise minimal wage has adhered to the acknowledged components.



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