Saturday, May 1, 2010

Reiterates call for minimum wage

Message by MCA President Datuk Seri Chua Soi Lek in conjunction with Labour Day

This Labour Day, MCA pays tribute to all workers who in one way or another have contributed towards the nation’s economic growth.

At the same time, we reiterate our call for the establishment of a Minimum Wage Council which would look into gradual implementation of minimum wages according to industries. Minimum wages will ensure that all Malaysians will enjoy a decent standard of living, thus enabling Malaysians to budget steadily and regularly for the family’s monthly expenditure.

Implementation of a minimum wage policy revolves around its effect on employment, productivity, inflation and the country’s competitiveness. It will galvanise changes in the economic model.

The concerns that deployment of minimum wage would make Malaysia a more costly place to do business thereby resulting in a drop in foreign investment is only valid if a blanket country-wide minimum wage is enforced irrespective of sector. However, this concern can be overcome if minimum wage is introduced in high growth sector especially those heavily dependent on foreign workers. This should be accompanied by the government providing incentive like grants or loans to encourage industries to invest, to embark on capital expenditure and training to increase productivity.

Minimum wage should not only be viewed as being aimed at improving the standard of living of workers but also as the driver of productivity and innovation. With a reasonable income, productivity will increase as workers will have a better attitude towards work as their income enables them to sustain their living. A change in attitude by the workers coupled with training and technological investment, will help Malaysia gradually wean off its addiction to cheap and low skilled foreign labour to drive its economy.

To cite an example, the oil palm industry faces shortage of workers which results in employers relying on foreign labour. However, if more research and development are intensified to come out with efficient mechanical harvesters for the industry, this will ensure higher outputs and reduction of foreign labour.Some trial results have shown that with mechanization using the motorized harvesting pole, the workforce for harvesting could be reduced by half, land-to-labour ratio could be doubled, productivity tripled and the harvesting cost cut by 75%. However there is reluctance in heavily investing in R&D to improve and make the machine afforadable as it will be easier to engage foreign workers.

The unemployment rate of Malaysians will be lowered as minimum wage will attract the locals to participate in the labour market and with the reduction of foreign workers it will help reduce the financial remittance overseas by foreign workers that has increased to RM18 billion.

While the private sector may see diminished profits initially when minimum wage is implemented, through innovation and higher productivity, there will be more returns in the long run. It is MCA’s hope that the government will seriously look into setting up a Minimum Wage Council for the progress of the nation and its people.

Datuk Seri Dr Chua Soi Lek
MCA President

-MCA online-

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