Proposed minimum wage increase long overdue

Proposed minimum wage increase long overdue

The monthly income of RM2,700 for a single adult in Kuala Lumpur published in the Bank Negara Malaysia 2017 Annual Report does not refer to the median income.

Claim:

According to The Edge Financial Daily article entitled “Proposed minimum wage increase long overdue”, the current minimum wage of RM1,000 for Peninsular Malaysia and RM920 for Sabah, Sarawak and Labuan is way below BNM’s suggested median income of RM2,700 for a single adult in Kuala Lumpur as mentioned in its 2017 Annual Report.

Source: The Edge Financial Daily, 3 May 2018

Fact:

The monthly income of RM2,700 for a single adult in Kuala Lumpur published in the Bank Negara Malaysia 2017 Annual Report does not refer to the median income. It is a provisional estimate of a living wage for a single adult in Kuala Lumpur. The concept is also different from the minimum wage and therefore does not supersede the relevance of the current minimum wage of RM920 – RM1,000.

The living wage is a guide on the income needed to attain a minimum acceptable living standard. In addition to meeting basic needs, the living wage also provides for a meaningful participation in society, the opportunity for personal and family development, and freedom from severe financial stress.

The living wage also serves as a guide for employers to consider paying employees according to the needs of a minimum acceptable living standard. The ability to pay a living wage should be assessed with due consideration to employees’ productivity, so that it does not translate into unwarranted increase in cost that might lead to higher inflation.

Click here to read the box article entitled “The Living Wage: Beyond Making Ends Meet” in BNM’s 2017 Annual Report

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