KUALA LUMPUR: When Mr Ahmad Zulkarnain, 31, graduated with a degree from a local university back in 2018, he believed that it would be a stepping stone to a better life.
But for the past few years, he has been stuck earning a monthly salary of RM3,500 (US$750) working for a small engineering firm in the Klang Valley.
As a single man, Mr Ahmad said that he can scrape by but is left with a few hundred ringgit each month after paying off his rent, car instalment payments as well as student loans and daily necessities.
He noted that things have become tougher at a time when the prices of goods have skyrocketed due to inflation.
“I have asked my employers for a raise, but they have been telling me to wait for quite a while now. I have been on the lookout for other jobs as well but have difficulty in finding something that can pay me more,” said Mr Ahmad, who hails from the state of Perak.
When Malaysia’s Economy Minister Rafizi Ramli announced on Nov 30 that the government was in the process of implementing a progressive wage policy, Mr Ahmad’s interest was piqued as he believed that it was a good initiative that may potentially increase his monthly pay.
Designed to be voluntary, incentive-based, and productivity-linked, the policy is aimed at improving the wages and working conditions of low-income workers in Malaysia.
It takes inspiration from Singapore’s Progressive Wage Model implemented and identified in specified sectors, where a multi-year salary increment schedule is set out for workers in tandem with skills acquisition on their part.
Only Malaysian employees who earn less than RM5,000 a month will be eligible for the programme, with workers from multinational and government-linked companies exempted from participating in the project.
When tabling a white paper on the policy in parliament, Mr Rafizi said that the voluntary programme will target 1,000 firms for the pilot project that is expected to begin next June, with a focus on micro, small and medium enterprises.
He added that according to official data, wages grew at an average of 4.1 per cent from 2011 to 2022, with low wages having a serious impact on the lives of workers.
While Mr Ahmad looks forward to any policy that may boost his wages even by a few hundred ringgit, there is scepticism among other stakeholders on the implementation of the policy.
Employers have expressed concerns about its potential impact on their businesses and its viability in the long term while workers’ groups are worried that the policy will turn out to be another wage subsidy scheme.
Separately, an economist told CNA that the policy needed to be in place for several years beyond the initial one-year trial to induce behavioural changes in employers but believed that it is a step in the right direction to raise the wages of low-income workers in the country.
“It is a win-win model for both employers and employees. For the employees, it is a commitment for self-development and self-initiative while getting a rise in wages. For employers, the higher productivity of employees will offset the cost of higher wages,” said Mr Lee Heng Guie, an economist and executive director of the Socio-Economic Research Centre (SERC).