THE Economy Ministry is working with the Human Resources Ministry to prepare policy options to be presented to the National Economic Action Council, which will discuss the best strategy to increase wages, said Economy Minister Rafizi Ramli.

He said engagement sessions will be held with key stakeholders to obtain views from all parties.

“The details and mechanism of the final policy will be decided based on comprehensive considerations, including affordability and cost implications for the private sector, sequencing of implementation and mutual agreement between the government, employers and employees,” he said in a statement today.

Rafizi was commenting on a statement by the Malaysian Employers Federation, which claimed wage-related policies fall under the jurisdiction of the Human Resources Ministry, not the Economy Ministry.

Rafizi reportedly said the government hopes the private sector will commit to offering its cooperation to realise a policy of progressive wage rises to tackle the growing cost of living.

Rafizi said his Ministry is responsible for the economic planning of the country as a whole, but as efforts to improve other economic structures continue, the ministry will emphasise the aspect of raising wages that is fair to all parties.

He said wages that do not match the cost of living are the main issues hindering Malaysia’s transition to a high-income economy.

“Malaysia’s compensation of employees to gross domestic product ratio for 2019 was 35.9%, well below other developed countries such as Germany (59.4%), the United Kingdom (55.5%), Australia (46.9%) and Republic of Korea (46.8%). 

“The real median wages and entry-level wages have fallen after the pandemic and remain lower than before the pandemic,” he said.

Rafizi said wage growth is a main thrust for structural reforms to achieve the compensation of employees target as set out in the 12th Malaysia Plan. – Bernama, July 13, 2023.