MEF says backing Putrajaya's bid to address long-standing income stagnation through progressive wages
KUALA LUMPUR, Feb 6 — The Malaysian Employers' Federation (MEF) today said it supports the Anwar administration’s initiative to boost workers’ income after decades of stagnation through the Progressive Wage Structure (PWS).
MEF president Datuk Syed Hussain Syed Husman said the government's recognition of PWS serves as a response to growing apprehensions related to the increasing cost of living and the enduring problem of low wages, especially in lower-level occupations.
“MEF is an ally to the government through the established tripartite partnership between the government, the private sector employers and the trade unions to provide a balanced and competitive working environment that is attuned to the global requirements.
“Our efforts to establish a better business environment are reflective of the changing calls to reexamine the wage structure, gender inclusion, and safe and fair work ecosystem,” he said during a conference called “Malaysia Madani: Progressive Wage System”.
His quotes were made available to the media.
He pointed to the fact that micro, small, and medium enterprises (MSMEs) make up 97.4 per cent of the 1,173,601 registered businesses in the country, with a remarkable growth rate of 11.6 per cent in 2022.
He added that since microenterprises account for a significant 78.7 per cent of the total MSMEs at 923,667 firms, the PWS is a positive initiative that will transform the wage system.
Also speaking at the same event, Deputy Economy Minister Datuk Hanifah Hajar Taib said Malaysia has faced persistent labour market stagnation since the early 2000s, exacerbated by global disruptions and inflation, impacting the poorest in society.
She said rather than relying on short-term price subsidies that strain government finances, a more effective long-term strategy to combat the cost of living challenges involves increasing wages.
“To combat the detrimental effects of the cost of living, a low-hanging fruit for most governments is to artificially subsidise prices so people can continue to get by. However, this remains a short-term solution, that only strains the fiscal space government can work in, and fails to see the other side of the coin.
“Instead of looking at lowering the price, increasing the wages ought to be part of any meaningful, long-term strategy that looks to reform our unique labour market,” she added.
In November last year, Economy Minister Rafizi Ramli informed the Parliament that Prime Minister Datuk Seri Anwar Ibrahim’s administration plans to initiate a trial phase of its progressive wage programme by June this year.
