IT is a daily struggle for minimum wage earners as they try to make ends meet, with the rising cost of living and financial hardship. 

They are hoping that Putrajaya would intervene quickly by increasing the minimum wage in line with the National Wages Consultative Council Act 2011, which requires a review every two years. 

They told The Malaysian Insight that increasing the minimum wage to RM1,500 from the current RM1,200 would alleviate their burden and struggle of having to live on a tight financial budget. 

For Afiq Aiman, 25, who lives in Jitra, Kedah, his pay of RM1,200 as a marketing manager is far from sufficient despite the popular belief that less developed states or towns would be cheaper to live in. 

“Many people think just because you work in Kedah, a salary of RM1,200 is enough. But as someone who earns that amount, I can tell you that it is a struggle,” he said. 

“I am a single person earning this wage and already struggling. I cannot imagine those earning this amount with a family,” Afiq said.

Afiq said after paying all his bills, which usually comes up to RM787, he would be left with just RM417 to survive for the rest of the month. 

“This amount is just enough for me to eat. I am barely able to save for other things in my life, like marriage or emergencies,” he said. 

“If I am fired tomorrow, my savings will not be enough to cover my living expenses before getting a new job,” he said. 

Afiq said if the minimum wage is increased to RM1,500, it would help him save up more money to ensure a more secure future. 

The government is expected to raise the minimum wage by end of the year from RM1,200 to RM1,500.

The suggestion was, however, met with criticism by the Malaysian Employers Federation, which claimed it would further hamper the economic recovery of small businesses. 

Human Resources Minister M. Saravanan defended the move, saying the country needs to increase cash flow to revive the economy and to take care of the people’s wellbeing.

Currently, the ministry is awaiting cabinet approval before implementing it.

Everything is expensive

A 28-year-old who only wanted to be known as Jil told The Malaysian Insight the minimum wage he earned was insufficient for him, having to look after a family of five. 

He said to get some extra income, he and his parents take on a side job – farming. 

Jil, a Sabahan who is a quality assurance manager working in Tawau, said that while increasing the minimum wage would help ease some of his burdens, it would still not be enough. 

“I studied in Universiti Malaysia Sabah, taking the food science course. I thought it’d be easy for me to get a job after graduating,” he said. 

“Turns out most employers prefer Sijil Pelajaran Malaysia holders because they wouldn’t have to pay high salaries. It’s really saddening,” he said. 

Jil also said that he was disappointed with the government for the delay in raising the minimum wage. 

“I’m not surprised that the government would delay this as most of the politicians we have now have only known wealth throughout their lives,” he said.

“So their policy-making is based on trying to help their peers instead of the poor and suffering rakyat. Suffice to say, I don’t see a bright future for this country in the hands of those people,” he said. 

For Wani, 27, who works as a sales clerk in Semabok, Malacca, living with the minimum wage means buying only what she needs and never what she wants. 

“With a minimum wage, my life is just paying a monthly commitment. I get my salary today and it’s gone by tomorrow. I can only save once in a blue moon and I buy only what is necessary for me, not what I want,” she said. 

“An increase in the minimum wage can help me to save for the future, it can also help me buy necessities without having to ration. I have no high purchasing power with what I’m being paid right now,” she said. 

Like Jil, Wani said the salary increase should not be delayed until the end of the year as it is too long a wait. 

She said the price of goods was rising, with the possibility of water and electricity tariffs increasing, including petrol prices. 

“In other words, everything is expensive. So let it go hand in hand. It will be easier for us to manage finances,” she said.

“The more employers make, the more workers lose out. Many economic activities are already underway. Although daily Covid-19 cases are high, the economy is still running as usual. Employers must have strategised and know what to do if the economy has to close or slow down,” she said. 

Meanwhile, an anonymous 25-year-old living in urbanised and developed Petaling Jaya, Selangor, is barely getting by with just RM1,500 monthly as a digital marketing executive. 

“I can’t deny that living with minimum wage has in some way tortured me. With the rising prices of groceries and the cost of the daily expenses, RM1,500 for a month is not enough,” she said. 

“I have to restrict my monthly budget to the extent I have to limit my daily food intake. Some days I don’t even have my lunch or dinner. To cook and bring my own food? Even the groceries cost me a fortune,” she said. 

She said raising the minimum wage would be of great help to a fresh graduate like her. 

“An RM300 increment might seem little for some people, but with RM300, I can have a proper meal. I can send more money to my parents. Raising the minimum wage to RM1,500 will affect my mental wellbeing too,” she said.

Importance of raising minimum wage

Edwin Goh, a researcher from The Centre, told The Malaysian Insight that having timely updates of Malaysia’s minimum wage is critical to ensure closer alignment with various benchmarks and cost of living indicators, such as the national poverty line, median income, inflation rate and more. 

He said a regular and more forecastable increase was better than a drastic sudden increase when updating the minimum wage, as the latter has a greater impact on businesses. 

“Also, it’s written in the National Wages Consultative Council Act 2011 that the minimum wage shall be reviewed at least once every two years. By law, the new minimum wage should be implemented this month, as the last update was done in February 2020,” he said. 

Goh said the government’s decision determines workers’ take-home pay and essentially their ability to make ends meet. 

He said the minimum wage sets a legal floor for wages and salaries of the lowest-paid employees. He added that for informal workers and those without employment contracts, the statutory wage floor also serves as a benchmark for them to estimate how much they should be earning. 

He said from 2012 to 2022, the minimum wage in Malaysia has only increased by a total of RM300, which translates to around 3.3% a year nominally, or around 1.5% annually after accounting for inflation. 

“Assuming there is no frequent timely minimum wage review, these minimum wage earners would increasingly struggle to make ends meet as the prices of daily goods increase faster than their income,” he said. 

He said statistics from the Employment Insurance System last year showed that about 8.8% of workers in Malaysia were paid less than the current minimum wage of RM1,200 per month, as of the fourth quarter of 2020. 

However, Goh said the figure, in reality, could be higher if different types of informal workers who also work an equivalent of full-time hours but are not captured by the government employment database are factored in. 

He said the current minimum wage of RM1,200 a month and the proposed figure of RM1,500 a month was still far below the living wage estimates, be it Bank Negara Malaysia’s living wage estimate of RM2,700 for singles, or Social Wellbeing Research Centre’s reference budget level of RM1,870 for unmarried public transport users. – March 3, 2022.