As a country we have made great progress in recent years. Our economy has grown, our exports have increased, and our skills have been enhanced. But, in the spirit of 1Malaysia, I want to make sure every member of society benefits from this progress. That’s why during the Labour Day 2012, I was pleased to announce the introduction of a minimum wage.
For the first time in Malaysian history, workers will soon be entitled to a minimum of RM800-900 a month, depending on their location. This will affect over 33.8% of workers who currently earn less than RM700 a month.
In principle, I am clear that this is the right thing to do. The minimum range was decided after taking into consideration several factors as proposed by the World Bank such as cost of living, poverty line index and unemployment rate, and will be reviewed every two years to account for any changes.
In practice, however, we do have to carefully consider the correct balance between guaranteeing workers a decent wage and encouraging employers to hire workers. Some international studies indicate that higher minimum wage can potentially affect demand for workers, especially youths lacking experience.
My government is determined to ease this transition for the greater good of the country. In calculating this minimum wage, we have taken into consideration the need to maintain overseas investment in our country – which provides needed capital for generating jobs.
We are also creating more and more job opportunities through the Economical transformation Programme (ETP) in various industries such as tourism, wholesale and retail. We are targeting to create 3.3 million jobs by the end of the next decade. In the meantime, I also encourage Malaysians to keep tuned to the ETP to find out which industries they can look towards for more opportunities.
This is a day for recognising the role played by our workers, and I’m confident that this new policy will benefit many workers across the country. Happy Labour Day.
[Click here] to read my speech announcing the minimum wage.