KUALA LUMPUR: The proposed progressive wage policy that will complement the minimum wage structure, will be voluntary in nature, and is incentive-based and productivity-linked.
Prime Minister Datuk Seri Anwar Ibrahim said the policy, which was discussed in the National Economic Action Council (MTEN), would serve as a shift towards recovering the labour market that could be enhanced more consistently with a more balanced wage distribution.
"The policy model was proposed after MTEN took into consideration the views and interests of employers and workers.
"This policy, which complements the minimum wage policy, would be followed by guidelines for the annual progressive wage for each sector, job and level," he said in a statement today.
Anwar, who is also finance minister, said preliminary engagement sessions showed that 62 per cent of employees and 80 per cent of companies had given positive feedback on the proposed policy, while MTEN hoped that it would be well-received by as many employers and workers as possible.
Next, further discussions and engagement sessions with stakeholders, especially industry players, businesses and employees would be held, he said.
He said the matter would be brought to the cabinet in fine-tuning the implementation mechanism that would be done in stages and to explore the need for fund allocation for incentives that would be determined based on the government's financial situation and policy needs.
"MTEN is of the view that the progressive wage policy is one of the labour market's reforms to ensure Malaysian workers are not burdened with the cost of living and able to enjoy dignified salaries, for the wellbeing of the people and achieve the agenda to uplift the country's economy."
He said the Madani Economy: Empowering People framework determines the country's direction in the medium-term, especially in placing Malaysia as an economic driver in Asia and among the 30 largest economies in the world.
"At the same time, following the wage share ratio drop from 37.2 per cent in 2020 to 32.4 per cent in 2022, the government aims for the ratio to increase to 45 per cent of the overall earnings.
"The wage issue is a main concern that can no longer be neglected."
According to the statistics on wage (formal sector) for the first quarter of 2023 unveiled last week, over 2 million workers in Malaysia earn a monthly salary of less than RM2,000, he said.
He said this situation was even more alarming for youths aged 20 to 24 where the median monthly wage was RM1,682.
"For most Malaysian employees, their salary would only reach RM3,500 when they are aged between 40 and 49, the highest throughout their career."