Tuesday, March 06, 2012

Minimum Wage At RM1,000

Finally after years of to and fro, we have come to some form of minimum wage standard. Naturally the associations such as SMI Association would say things like some 80% of small medium employers may have to fold because of that.


Point 1) Are we not trying to move to get out of the middle income trap? The country has been a boom town for foreign workers, many being paid below that level. While that makes us competitive in some industries, safe to say, those industries seriously should not be around our country if we are going to keep developing. Being a magnet for cheap labour will only further erode the overall labour wage scale for the rest.


Point 2) To the SMis, if you can only operate profitably with wages below RM1,000 ... methinks you should shift your business to Cambodia or Laos. If you so choose to rely on such low wages as part of your business model, safe to say, your business is so sunset, you cannot even see the sun, in fact you probably see the moon rising. What future you think you have, the country would have if we operate predominantly in those industries?


Point 3) A fair wage. Seriously, can anyone who is at management level think properly about a person living under RM1,000 a month. Even if they can scrape by, ....  a caring society, a maturing society, a balanced society would not be able to accept a huge grouping living under those conditions. The wage gap cannot be so unrealistic and oppressive. Just because some "disadvantaged" people may have to accept whatever wages the employers may set, does not make it right. Some may not have the ability to fight for their rights to a better life or a fairer treatment, does not mean they do not deserve a fair go.


Point 4) I am not advocating a socialistic type of society, but there has to be a redressing of balance. If not, what we call capitalism is another word for exploitation. So, suck it up and move on. Seriously folks, our country has NEAR ZERO safety net ... no unemployment benefits, no dole, no unemployment insurance, a so-so free healthcare / education system ... wages have to be fairer. We need a liveable wage for all.

18 comments:

Rk said...

Fantastic reasoning. Humans has to have dignity to do their job..

ronnie said...

Dear Dali,

What happened to A Whiff of Lemongrass? Has she stopped blogging?

I asked you as you know everything!

ronnie said...

Dear Dali,

What happened to A Whiff of Lemongrass? Has she stopped blogging?

I asked you as you know everything!

Live Long MU Fan said...

Husband and wife work ...total pay RM2000. How to have children and a home?

But if so difficult for SMEs, maybe staggered approach... minimum pay of RM800 this year, and increase to RM1000 in 2 years times?

TH said...

While I have to agree with what you say, I am also sure this move will further spike the already horrible inflationary pressures as bizmen will increase their prices to compensate for this increase.

lmenwe said...

Sorry to offend but I disagree with your opinion. Yes, for those manufacturing companies that are unable to survive for wage hike should be shifted to emerging countries but there are still plenty of jobs doesn't worth RM1000/month. Besides that a wage increment will not solve the problem. What I foresee is inflation. The bosses will try to push the costs to consumers. Besides that there are 1001 ways to exploit the workers in order for the bosses to maximize their profit. I agree that minimum wage rate should be set but it is just a step to prevent the exploitation of the workers. It is not a way to solve the income disparity.

lmenwe said...

Sorry to offend but I disagree with your opinion. There are some jobs that doesn't worth RM1000/month. What I foresee is inflation will whack us. In order to maximize profit, the bosses will try to push to costs to consumers. Besides that there are 1001 ways for the bosses to exploit the workers.
Minimum wage rate is just a method to prevent the workers from exploitation. It will never solve income disparity in Malaysia. What we need is a structural reform in the country.

CHS said...

I too offend point 2 u pointed out. The words you used is a little harsh to me. If any SMis that couldnt afford to pay minimum wage of RM 1000 and should shift to Cambodia or Laos as written. Then all giants such as supermarket and factories workers shouldnt be even be allowed to operate in Malaysia as most of them are paying way lower then the minimum wage in rural areas. Furthermore, without SMis, many would be even unemployed now. Minimum wage is a must but in stages.

Yew Chang said...

Dali,
While I agree with you on the side that a minumum wage should be set, I also am sure that what Imenwe will happen as well.

As all developing and developed nations go, the middle class will contribute to most of the countries taxes (in terms of their income percentage), yet at the same time feel the most impact on the governments pro- lower income group policies.

It is nice to be considerate of the lower income group, but yet, as a new business owner or a professional in this country, being considerate only makes your money shrink quicker. At the end of the day, if the businesses are taking care of themselves, and the poor are being manipulated/ taken care by the gov, who is left to fight for the rights of the middle class?

jeremy tan said...

Hi everyone,
what middle class??? In a few years time, they will be wipe out by inflation.

GDP per capita and PPP shows that we are not even close to a middle income society. What more a high income society Mr. Najib.....

There will be the poor and the rich. Ask Ben Bernanke and he will deny it. Ask Ron Paul and he speaks the truth.

durianpicker said...

Min. wage law encourages employers to pay a wage no higher than the value of an additional hour's work.

It forces employers to dismiss low productivity workers. Most affected to freshie, teenagers and those with less education/skill.

David Neumark illustrated: Suppose that a job can be done by either three unskilled workers or two skilled workers. If the unskilled wage is $5 per hour and the skilled wage is $8 per hour, the firm will use unskilled labor and produce the output at a cost of $15. However, if we impose a minimum wage to $6 per hour, the firm will instead use two skilled workers and produce for $16 as opposed to the $18 cost of using unskilled workers.

My recent talks with few bosses reviewed unilaterally that they will cut head count and figure ways to increase productivity (squeezing more juice with lesser head count).

Advocates of higher minimum wages are often motivated by the purest of concerns for the poor. However, the minimum wage has been described as a "maximum folly" by many economists for many years because it hurts precisely the people who most desperately need help.

durianpicker said...

Min. wage law encourages employers to pay a wage no higher than the value of an additional hour's work.

It forces employers to dismiss low productivity workers. Most affected to freshie, teenagers and those with less education/skill.

David Neumark illustrated: Suppose that a job can be done by either three unskilled workers or two skilled workers. If the unskilled wage is $5 per hour and the skilled wage is $8 per hour, the firm will use unskilled labor and produce the output at a cost of $15. However, if we impose a minimum wage to $6 per hour, the firm will instead use two skilled workers and produce for $16 as opposed to the $18 cost of using unskilled workers.

My recent talks with few bosses reviewed unilaterally that they will cut head count and figure ways to increase productivity (squeezing more juice with lesser head count).

Advocates of higher minimum wages are often motivated by the purest of concerns for the poor. However, the minimum wage has been described as a "maximum folly" by many economists for many years because it hurts precisely the people who most desperately need help.

cheekiong said...

Have faith in labour mobility, people.

3pmsupertrading said...

sorry to offend u, but have u been a boss overseeing a bigger biz, u know many are not even worth the rm800 per month u pay to them. they r like a farking cow. u kick them they move abit. in ur absense they sleep or steal.
this is the retard nation.

Unknown said...

Just my opinion as a small business owner ( servicing and machines reconditining )for the past 15 years.
Setting a minimum wages per month wil not hurt the employer and benefit the employee, it is just for show. If my current employee earning a salary RM 850/month and I have to increase to RM 1,000.00, it will not hurt me anything except for cash flow isssue, not for profit issue because those day I pay them mostly 2 to 3 months bonus, from the moment the minimum salary is set it, just cut the bonus. Overall anual income remain unchanged.

The most important issues in order to achieve high income country must also accompanyied with improved skill and knowledge by the employees/workers, if our education system now remain unchanged, we will have the same graduates for many years to come with lack of confidence, communication skill in English and thus earning the same level of salary upon leaving universities/school or college.

High income MUST associated with high and efficient performance, otherwise the situation for the economy will be worst. There is no U-turn once the min. salary range for the country is set. If the knowledge, working attitude for the current workers is not so good, concession can still be made with lower salary. What will happen in the event the performance/attitude/knowledge and ability of the workrs remain unchanged but with higher salary? Our products will not be competive or the business owners will seek for alternative solution for better workers/outside Malaysia even paying the same min range of salary. Do my comments make sense?

Unknown said...

Setting a minimum wages is just for show, what I said so :

1. For me as small business owner, for those employees currently earning RM 850/month, I have them paid 2 to 3 months bonus all this while. Once the minimum salary set it, the bonus will be cut. Overall anual income remain unchanaged except effecting monthly cash flow only.

* To achieve high income country/setting minimum salary /wages MUST associated with minimum accetpable skill and works performance. If our current education system remain unchanged we will still have the same level of graduates/fresh manpower supply in the country for many years to come.

* Without getting a higher efficient manpower/employees in most of the business but continue with higher salary, this will lead to the business owner to look for alternative solution to continue business in different location/countries with better skill and higher efficient workers even if have to pay the same level of min. wages.

* If wages increase but without better efficiency in the work force/manufacturing/servcing etc.. Our products will not be competitive enough thus the overall business will shrink, what will happen to the country ?

* There is no U-turn for the salary range once it is set, currently most of the lack of confidence, communication skill either fresh or experienced still have concession to make ; by accepting lower salary. What will happen if most of the organisations/companies are mostly flooded with the current level of knowledge/attitude/skill but earning higher income ? The country economy will collapse. Do these make sense ?

Angry bird said...
This comment has been removed by the author.
Angry bird said...

Almost all Malaysians cannot live by a wages of rm 850, as those given to foreigners like bangladeshis,inddons and myanmars,as they can go into the bushes and jungle to built illegal housing steal electricity n water for free and dont forget to add the cost of levy employers have to pay.For every employer,there is an average 10 employee working for a livehood,but with inflation rising you are forgeting them and leaving them behind,UMNO cronies were holding the labour permits were making so much monies, inmagine rm 2,000 from each bangla and another rm 2,000 from his employer,and we have more than3 million foreign workforce to count', last time it was car permits.As days come unrests were sure to happen,when wages cannot pay for living.looking back at the 70,s construction boom locals hardearned money were recycle back to economy with restaurants and food oulet having fulltables daily.Now monies were leaving the country in million daily leaving other sector stalemate.i believe a qouta system of 70:30 of locals must be met in every sector with a different salary scale for our own citizen to survive''.