KUALA LUMPUR: The Malaysian Trades Union Congress (MTUC) says the implementation of the RM1,500 minimum wage for workers is no longer relevant and sufficient to cover the cost of living in big cities, especially the Klang Valley, Penang and Johor Baru.
MTUC president Mohd Effendy Abdul Ghani said with the continued rate of inflation, the real value of RM1,500 is decreasing, resulting in reduced purchasing power among workers.
He said the mimimum wage amount was no longer relevant and the government needs to speed up the review of the minimum wage rate in a more appropriate period without having to wait up to every two years for reassessment.
He said it was important for the government to consider a more flexible adjustment of the minimum wage to ensure the well-being of workers is balanced with the local cost of living.
"The cost of living in big cities such as Kuala Lumpur, Penang and Johor Baru is much higher than in rural areas.
"In this context, the minimum wage of RM1,500 is not enough to cover basic needs such as housing, food, and transportation, especially for those with families.
"This has caused many workers in big cities to cut back on important expenses or find additional sources of income to meet their daily needs," he told Berita Harian.
The previous Minimum Wage Order was enforced in May 2022 involving the implementation of the minimum wage of RM1,500 compared to the previous RM1,200.
Human Resources Minister Steven Sim was reported to have said that the National Wages Consultation Council is currently in the process of preparing a report on the proposed minimum wage change to be submitted to the Cabinet.
Sim said the council, which consists of representatives of employers, workers and the government, held a meeting at the end of June to discuss the matter.
At the same time, Mohd Effendy said the minimum wage still needs to be adjusted to the rate of inflation, the increase in current prices of goods and services over time.
He said this was important to ensure that workers do not lose their purchasing power and can continue to meet their basic needs even in the face of economic changes.
"Therefore, the adjustment of the minimum wage needs to be done periodically to maintain a balance between workers' income and the increasing cost of living.
"It is important to ensure that the minimum wage is reviewed and increased at a rate consistent with inflation and the rising cost of living.
"This measure will help maintain the well-being of workers and ensure they are able to meet their basic needs with the income they earn," he said.
He added, with Malaysia's economic development moving towards a high-income country, an increase in the minimum wage is necessary to support economic growth and improve the standard of living and well-being of workers.
Awareness about the implementation of the minimum wage was also very important because there were still weaknesses in its implementation.
"There are reports that there are still employers who do not implement the minimum wage as stipulated. Therefore, continuous enforcement needs to be implemented to ensure that this minimum wage is consistently observed by all employers.
"This will help in protecting workers' rights and ensuring fairness in the national employment system," he said.