RM1000 And RM920: Is It Enough?

tumblr_nj8fc5DvmS1tp42tfo1_500I AM compelled to write about this thorny issue after reading news following the 2016 Budget yesterday.

I am not a big fan of budget tabling by the government. Yes I would glance through the news for pointers (whichever that screamed benefits for common people like you and me) but that’s about it.

And it was announced in yesterday’s Budget 2016 that the minimum wage increase for private sector workers in the peninsula from RM900 to RM1,000, and from RM800 to RM920 for those in Sabah, Sarawak and Labuan.

Yes it was an increase so it should be viewed as a good thing. But seriously, only RM920 for Sabah, Sarawak and Labuan?

Now that I am living in a small village where the majority of adults joined the workforce for RM900, I wonder how on earth are they surviving on daily basis?

People tend to dismiss the grouses by saying that living in the village cost less compared to the big cities.

That’s what I thought too before, when I was still living and working in the city. But now that I am living among them, I can see their daily struggles with my own eyes. I beg to differ to those people and so-called economists who claimed that living in a village cost less.

Yes it would be true in 1970s and 1980s. Not now. Not in 2015.

Granted that we,, who live in the village don’t have to worry about paying several tolls charges just to cross the area like those who live in the Kuala Lumpur city centre for work or appointments in any given day.

But we, people in the village, face rising cost of living too. Honestly, with the economic uncertainties, we, the villagers, don’t really care if Malaysia will achieve its dream of becoming a high income economy in 2020. There are more immediate things that we have to worry about such as school fees to pay, kids’ essential needs and if there’s enough food to serve on dinner table. Will we be able to pay our monthly car installment this month? With GST, everything is pricier.

And for your information, we, people in the village need cars too. Not to show off. But it is out of necessity. Especially if you have elderly parents and small children. Public transport is unreliable and hospital will take about at least an hour to reach. Government clinics? Some are nearby but definitely not a walking distance and you can’t possibly carrying four young kids on the small motorbike, can you?

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Like husband and wife F and K, their combined wages as general worker and a cook at a private establishment respectively totalled RM1,400/month. With four kids and three are at schooling age (15, 12, 7) and a 10-month old baby, it is a daily struggles.

Despite the minimum wages (for private sector) being set at RM900, his company decided to pay him at a lower lower wages for RM700.

And living with his elderly mom, the couple save cost of renting or paying house installment and only have car loan to furnish monthly, but still they admitted that it a struggle indeed.

For young N, a fresh math and science graduate from local university, being new with no experience, she joined a manufacturing company as shipping executive and is earning RM900/month. And that’s before the deduction for EPF and Socso. Her net pay is only RM800+. With no overtime. Period.

Living with her parents and using family’s car and motorcycle to work does help. “I am still struggling to save money. And with my low wages, I think I have to shelve my dream of owning a Myvi car for now,” she lamented.

According to a report, to quote a 2005 figure, yes 10 years ago, for every ringgit earned, Malaysian employees get 28 sen, company 67 sen and the government 5 sen; unlike in Singapore where employees get 42 cents, company 47 cents and government 11 cents. Workers in Malaysia are short-changed by the government itself.

Apparently, before the Budget 2016 was announced, Malaysian workers via the MTUC-proposed increase of RM1,200 minimum wage and employers have the capacity to pay the extra RM300. Extra spending by workers will help the economy too. It seemed that the government decided to set RM1000 to appease the employers.

Myself, for once, was pretty out of touch when comes to market and salaries. But now that I have left my job with the leading media company in the country, I found myself being shocked with minimum wages received by those who are new to the job as the starting wages is at RM900. Yes that’s true that we are living in the villages, but this new reality-check left me totally gobsmacked. And as I asked around, the picture is pretty bleak for locals.

And to make matter worse, despite the government set the minimum wages, it still boils down to employer’s discretion.

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I can’t help but comparing the new minimum wages to Australia. Which is AUD2600/month. I know it is not fair to compare Malaysia and Australia. Australia is one of the countries in the world with the highest minimum wages. But I did it for the sake of comparing and I don’t even want to count the exchange rate. Just take that amount as RM2600. It would be a pay received by someone who has been working in the media for several years at least. But then again, media industry is known to be paying lot less than other fields.

The cost of living in Australia is higher. Things are more expensive there. I know. But still… And in the USA, the minimum wages (in New Jersey) is at USD70/day and USD335/week… Hey I know you will say, don’t compare Malaysia to Australia and the USA… And I haven’t even started to compare us to other developed nation closer to home such as Japan and South Korea and our neighbour next door, Singapore. Then who shall compare ourselves to? If we want to better ourselves to a greater height? To Zimbabwe? or Nigeria perhaps?

A recent World Bank study found that the percentage of wage increment in the country was flattening at 2.6% per year while productivity increased on average by 6.7% in the same period for the past ten years. It is obvious that the salary increment is not in line with productivity gains and the cost of living and this clearly indicates there is distortion in the local labour market, where the increment of wages fails to complement with the rising cost of living.

While others have moved up, Malaysia remained stagnated in low wages by allowing politically-connected people to reap the profit by recruiting foreign workers in droves.

too-many-people-spend-money-they-havent-earnedSome argued that weak labour laws and how foreign workers – estimated to number about 6 million, both legal and illegal – have suppressed and stagnated wages. The Malaysian government took the easy route of attracting foreign direct investments (FDIs) by offering low wages, unorganised work force and poorly skilled labour.

For God’s sake, minimum wages are basic wages, excluding any allowances or other payments. And is RM1000 and RM920 enough? Resounding NO!

And what I am writing here about just a small fraction of the lower income groups. And I haven’t touch about those who live in the city with same amount minimum wages… I can only imagine…

Now that I live and work among the villagers, I am feeling sad and helpless watching how many employers like estate owners and factories sneakily have adjusted the salary scheme to include allowances and other payment to be part of minimum wages. And nothing the employee can do. With the economic uncertainties, it is very risky just to quit one’s job to find another one, especially if you have few small mouths to feed and clothe. A

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