PENANG, Malaysia - This country's umbrella
trade-union body is pressing ahead with its
campaign for a minimum wage despite the
government's stand that such a benchmark would put
off foreign investors seeking a low-cost
environment.
The Malaysian Trades Union
Congress (MTUC) has stepped up its eight-year-long
campaign, which would mainly benefit
private-sector workers, after the government
awarded hefty pay raises to
civil
servants in May that in effect lifted
junior-ranking staff above the official poverty
line.
The general council of the MTUC, a
federation of unions representing all major
industries and sectors with a total of about
500,000 members, is due to meet this Thursday to
discuss its next move.
"I don't want to
preempt my colleagues on the council, but I would
say sentiment is brewing," said Abdul Razak Abdul
Hamid, the MTUC's Penang division chairman. "The
grassroots feel that something should be done by
the government."
In a rare show of
strength, on June 25 the MTUC staged a national
picket demonstration as hundreds of workers
gathered at more than a dozen locations across the
country. In mainland Penang, the turnout exceeded
organizers' expectations as some 1,000 workers
gathered along a busy thoroughfare near the Prai
Industrial Estate.
Workers waved placards
that read, "Don't marginalize workers," "Toll up,
sugar up, Astro [pay TV] up, wages not up,"
"Thailand, Indonesia [have] minimum wage -
Malaysia has none," and "Workers are suffering
from price increases,"
Gopal, an
electrical workers' union representative at the
demonstration, said, "Most factories in this area
are paying a basic [monthly] salary of as low as
RM350," or US$101.
Unionists have
maintained that employers are taking advantage of
the absence of a minimum wage to suppress wages
and exploit workers. They note that tens of
thousands of lowly paid private sector workers
earn monthly wages ranging from RM300-450.
Such paltry wages fall well below the
official poverty line monthly income of RM691 in
peninsular Malaysia, RM765 in Sarawak state and
RM888 in Sabah.
"Even five-star hotels in
Kuala Lumpur pay a basic wage of RM290 per month
to cleaners and waiters," noted the MTUC in a
memorandum urging Prime Minister Abdullah Badawi
to introduce a minimum wage.
The MTUC is
asking the government to introduce a minimum
monthly wage of RM900 (about $260) and a
cost-of-living allowance of RM300. It points out
that the minimum wage they are requesting is less
than the total monthly income earned by the
lowest-ranking civil servants, which is now above
RM1,000.
The MTUC's demands may have some
justification. Analysts have pointed out that an
individual would have to earn at least
RM1,200-1,500 to live in dignity in urban areas
such as Kuala Lumpur, where rentals, food prices
and transport costs have soared in recent times. A
decent minimum wage, the MTUC says, would attract
more Malaysian workers and reduce the growing
national dependence on foreign labor.
Migrants in the middle Not so,
counters Human Resources Minister Fong Chan Onn.
He said that a RM900 minimum wage would lead to a
surge in migrant workers from neighboring
countries, as Malaysian wages would rise well
above the average pay in those places. He pointed
out that a minimum wage would mean paying the same
amount to the 1.5 million legal foreign workers
already here.
"The minister has
inadvertently let the cat out of the bag," an
academic closely following the issue said. "The
government has always claimed that foreign workers
are only employed here on the same conditions as
local workers, that foreign workers are not being
used to keep the wage rate down," the academic
said.
"Now, [the minister] objects to a
minimum wage rate as it would mean that foreign
workers would have to be paid the same as locals."
This, he concluded, means that the Malaysian labor
market has been "distorted by the import of
foreign workers to deliberately keep down the wage
rate".
Government officials have also
expressed concern that a minimum wage would push
up operating costs and drive foreign investors to
Indochina, China and India. "We are as concerned
about workers' wages, but we must ensure we remain
competitive in the global context as well," said
Fong.
As an alternative to a minimum wage,
he said that a survey involving more than half a
million employees is being carried out to identify
the lowest-paying jobs in the country. The Human
Resources Ministry will then establish special
wage councils to regulate wages in the
lowest-paying sectors, he said.
The MTUC
stepped up its campaign after the prime minister
announced a hefty pay raise for 1.2 million civil
servants, ranging from 7.5-42%, which took effect
on July 1. He also announced a 100% increase in
the cost-of-living allowances. Those in the lower
ranks received the largest hikes in percentage
terms, lifting the monthly income of the
lowest-paid civil servants above RM1,000.
In justifying the wage hikes, Abdullah
said the government "acknowledges the higher cost
of living and is always sensitive to the impact of
rising prices, especially on the lower-income
groups". Cynics, however, pointed out that the
government could go to the polls soon - though its
term does not expire until 2009.
Whatever
the motive, unionists point out that low-income
private-sector workers have suffered because there
have been no major corresponding adjustments in
their wages to reflect the higher cost of living.
Union leaders argue that the government must have
carried out an in-depth study of the cost of
living and its impact on wage earners before
raising civil servants' wages and allowances.
"So there is no reason why the wages of 8
million workers in the private sector should be
suppressed," said the MTUC's Abdul Razak.
The aforementioned academic, meanwhile,
said a minimum wage would be a far more effective
tool in redistributing income in favor of the
poor. Many of these poor people are economically
disadvantaged ethnic Malays, the main
beneficiaries of the government's New Economic
Policy (NEP) affirmative-action policies aimed at
reducing inter-ethnic disparities.
A
controversial focus of such policies has been the
required 30% ethnic Malay and other indigenous
ownership in companies - an approach that over the
decades has concentrated wealth in the hands of a
small group, thus contributing to widening
intra-ethnic inequalities.
He pointed out
that about one-third of ethnic Malays employed
fall at the bottom of the occupational hierarchy.
At the June 25 demonstration in Penang, for
instance, most of the protesters were ethnic Malay
workers, with a sprinkling of Indians and Chinese.
"If the government is really serious about
closing the inter-ethnic income gap, an effective
way to do so would be to see that those at the
bottom get a better income - not screaming and
shouting about shares in companies and ownership
of commercial buildings, both of which are out of
reach of the vast majority of the people," he
said.
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