My letter in Malaysiakini

link here
Wait a minute, can S'gor enact minimum wage law?
Noor Hamzah | Dec 2, 08 4:48pm
I refer to the Malaysiakini report No minimum wage as yet.

There has now been a proposal for RM1,000 minimum wage for Selangor. What are the implications? It would be good for Selangor, that’s for sure.

There are millions of Selangor residents currently earning less than RM1000 and some even less than RM400 a month. Just go to rural Selangor for example, and ask around.

Ask those pretty shop assistants wearing the tudung at the local mini markets in Tanjong Karang or Sungai Besar how much they earn in a month and most would readily say it’s RM400 a month.

Those who earn more than RM1,000 a month would probably be a supervisor. A manager would get about RM1,500.

If you work in the Klang Valley, then I’m sure that a factory worker’s basic monthly wage is about RM700 to RM800. Supplemented with lots of overtime, sometimes working 70-80 hours a week, then a factory worker could bring home over RM1,000 a month.

That’s a lot of money.

What if the Selangor government manages to enact a law requiring employers to pay at least RM1,000 a month? Let’s not get into the argument whether the Selangor government can pass a law stipulating a minimum wage of RM1,000 in Selangor.

They will have to go through that hurdle first. What is the scope of Selangor state assembly? Can they pass a law requiring a minimum wage fo RM1,000 for their citizens?

My prediction is that a lot of employers would want their employees earn their RM1,000. So if an employee's work is currently worth RM500 a month, the employer would formulate a new strategy so that the employee's work would be valued at more than RM1,000. Otherwise, why bother employing anyone?

Two strategies can be implemented - either charge more for services and/or products, or make the employee work harder. Both suggests increased efficiency in the economy. An efficient economy adds value, increases GDP and everyone would be better off in the long-term.

So, in the short term, we would see a lot of workers lose their jobs because Selangor employers wouldnt need as many workers as before. Incidentally, Selangor has the largest number of immigrant workers, legal or illegal, from Indonesia, Bangladesh and India. If enforcement is lax (for enforcement of the minimum wage), local workers would simply lose their jobs to their immigrant counterparts.

I would like to think positive.

That enforcement of the minimum wage is fair and being carried out. That workers, irrespective of whether they are local or illegal/legal foreigners get the same treatment, ie, they getat least the minimum wage of RM1,000 for a 48-hour week. (or is it a 40-hour week now?). And that local workers ie, Malaysians are given preference over foreign workers.

Soon, there will be no shortage of labour in Selangor. Malaysians from all over the country, who were previously badly paid elsewhere, would migrate to Selangor. And with a basic wage of RM1000, the hourly rate for overtime work would also be higher.

Given chance to do overtime, they would bring home RM1,500 or more. And the flow-on effect would resonate throughout the state’s economy as higher income would generate higher spending which would also lead to higher leisure spending.

Granted, all thing being equal, there would also be a higher GDP growth for Selangor. Higher income in the long run. The rural base in Selangor would benefit the most. Because most people living in the rural areas have their own land to grow some of their needs, and won’t have to pay rent, because they build their own houses. They also save a higher proportion of their income.

The question is still: can Selangor enact a law on minimum wage

RM1000 minimum wage for Selangor; What is the implications?

It would be good for Selangor, sure.

There are millions of Selangor residents currently earning less than RM1000, some even less than RM400 a month. Just go to rural Selangor for example, and ask around, ask those pretty shop assistants wearing tudung at local mini market in Tanjong Karang or Sungai Besar, how much she earns in a month, most would readily say its RM400 a month.
Those who earns more than RM1000 a month would probably be a supervisor. A manager would get about RM1500. If you work in Klang Valley then I would be sure that factory basic monthly wage is about RM700 to RM800. Supplemented with lots of overtime, sometimes working 70-80 hours a week, then a factory worker would bring home over RM1000 a month.

Thats a lot of money.

What if the Selangor Govt manage to enact a law requiring employers to pay at least RM1000 a month? Lets not go into the argument whether Selangor Govt CAN pass a law stipulating minimum wage of RM1000 in Selangor. They have to go through that hurdle first. What is the scope of Selangor DUN? Can they pass a law requiring minimum wage fo RM1000?

My prediction is a lot of employers would want their employees earn their RM1000. So if an employee's work is currently worth RM500 a month, the employer would make a new strategy so that the employee's work would be valued more than RM1000. Otherwise why bother employing anyone? Two strategies can be implemented, either charge more for services and/or products, or make the employee work harder. Both suggests increased efficiency in the economy. An efficient economy adds value, increase GDP and everyone would be better off in the long term.

So in the short term we would see a lot of workers lost their jobs, because Selangor employers wouldnt need as many workers. Incidentally, Selangor has the largest number of immigrant workers, legal or illegal from Indonesia, Bangladesh and India. If the enforcement is lax (enforcement of the minimum wage), local workers would simply lose their jobs to their immigrant counterparts.

I would like to think positive.

That enforcement of the minimum wage is fair and carried out. That workers, irrespective of whether they are local or illegal/legal foreign get the same treatment, ie they get the at least minimum wage of RM1000 for 48 hour week. (or is it 40 hour week now?). And that local workers ie Malaysians are given preference over foreign workers.

Soon there will be no shortage of labour in Selangor. Malaysians from all over the country, who are previously badly paid would migrate to Selangor. And with basic wage of RM1000, the hourly rate for overtime work would also be higher. Given chance to do overtime, they would bring home RM1500 or more. And the flow on effect would resonate through the economy, higher income would generate higher spending, which would also lead to higher leisure spending.

Granted, all thing being equal, higher GDP growth for Selangor. Higher income in the long run. The rural base in Selangor would benefit most. Bacause most people living in rural areas have their own land to grow some of their need, and doesnt have to pay rent, because they built their own houses. They also saves a higher proportion of their incomes.

The question is still:
CAN SELANGOR ENACT A LAW ON MINIMUM WAGE?

Which Party Promises Minimum Wage?

My previous article on minimum wage was on the letter section on Malaysiakini some time ago.

Look at the case of Brazil, a basket case Latin American under IMF supervision back in the mid 90's. Now Brazil's economy is booming, and their Govt is taking steps to distribute income equitably.

My question:
Do we have a Govt that have 'fair income distribution' amongst it policies?

Brazil raises minimum wage by 9 per cent

RIO DE JANEIRO, Brazil (AP): Brazil raised its minimum wage by 9.2 percent Saturday to 415 reals (US$248; euro163) a month, boosting millions of salaries and pensions based on multiples of the base salary.

The increase from 380 reals (US$226.80; euro149.30) was more than twice the 2007 rate of inflation, a traditional index for pay raises in Brazil. Inflation last year was 4.5 percent.

The impact is greatest on lower-class families, with pensioners and salaried workers who earn little more than the minimum wage, economists said.

"It improves the income of more than 12 million pensioners and government retirees (and) heats up the local economy,'' economist Marcelo Neri, of the respected Getulio Vargas Foundation, told government news agency Agencia Brasil.

But the Union Statistics Department, or Dieese, said the raise was still insufficient to cover a family's basic needs, as stipulated in the constitution. An adequate minimum wage for a family of four is 1,924.59 reals ($1,149; euro756), Dieese said.

"That's an estimate of how much the minimum wage should be to adequately compensate labor,'' said economist Jose Mauricio Soares.

Race to the Bottom; Malaysia Must Improve Workers Benefit.

Interesting news that China has improve their workers working conditions and implement minimum wage laws.
Read it here.
Now China is not so cheap anymore, some companies are relocating to Vietnam.
And at this rate, Malaysia is still among the few countries in the world that doesnt have minimum wage laws. Soon these low cost cheap labour operations companies would relocate to Malaysia.

More jobs to Malaysians would you say?

More likely more jobs for foreign workers in Malaysia. The Govt reluctance to stop the inflow of foreign workers would see to that. A policy that doesnt make sense.

We are enriching the privileged few while leaving the workers subsist on low wages, creating general discontent poverty and social problem.

MTUC, Politics, Power and Getting 'what they want'.

Reading this report in Malaysiakini by Muda Mohd Noor, I disagree with the so called components trade union organisations who called for MTUC to desist from its political stance and affiliation. Its not that MTUC 'joining' or supporting Oppositionm parties, but rather the Opposition parties are supporting MTUC in its fight for minimum wage and better working conditions.

I believe that if MTUC make its political stance, suporting whatever party that support and fight for MTUC's causes, then MTUC would make headway in its fight for minimum wage and better working conditions.
Why do I say that?
Well, in Malaysia, and any other democratically governed countries, political clout would get you in power, and power would translate to gettting things done in the form of law provisions. When things are written in law of the country, then citizens has to do things according to the law.
Do you see the missing link here? MTUC doesnt have the political clout, hence cannot elect or sway MP's who are symphatetic to its causes. So whatever MTUC want, e.g. Minimum Wage Law, the MPs couldnt give a damn. Or its probably the case whereby our MPs are already swayed by parties who doesnt want Minimum Wage Law.

Reads this report also in Malaysiakini which stated that Ketua Pemuda Umno Johor, Datuk Razali Ibrahim discourages MTUC from getting involved in politics, meaning this fellow knows that if MTUC is a political force, which deliver a block vote of 10 million plus, then any political parties which rub MTUC the wrong way would be finished!

Human Resources Ministry under Datuk Dr Fong Chan Onn knows about this too. So he is using his deputy, Datuk Abdul Rahman Bakar to threaten MTUC with deregister.

Lets call for Human Resources Minister's resignation.

Sound a bit harsh? Not really.
But what can we do when the Minister concerned does not act in the best interest of workers? I am happy that he got an ear clapping from our Parliamentarian yesterday.
After all, who does he represent? Our workers or the rich taiko? We know that workers, as represented by MTUC dont have big clout or deep pocket.
So the BIG question is, who is our Human Resource Minister acting for? If his interest is to keep wages low so that companies will stay competitive, draw fat profits, then he is not acting in the interest of workers. I can safely charge that he is acting for the interest of neocons, capitalists and taikos.

Which bring us to the next question. Is the Prime Minister acting on our behalf, our interest the ordinary Malaysians? Read this in Malaysiakini article.

It says "No nations want to keep wages low BUT.."
Dont read the "No nation want to keep wages low", instead read carefully the essence after the word BUT.
It means our Prime Minister doesnt care how difficult it is for the lowly workers to make a living on RM400 a month as penoreh getah or RM600 a month as machine operator in a factory. All he cares is that the company that invest in the newly established industrial estates make huge profits, which in turn will spur more investment from overseas. Multinational companies would open new factories here, if we dont have enough workers, let open up our country to foreign workers from neighbouring countries.
Why?
Companies needing land for factories, so our powerful UMNO people could lobby State EXCO to convert agricultural land and hutan simpan to industrial purposes. UMNO people would buy the agricultural land at cheap prices and resell at premium as industrial land.
Remember PKFZ?
Then foreign workers agency would reap more profits bringing in foreign workers to work in the newly built factories.

Money to be made evrywhere, why bother fighting for the lost cause.. our local workers.

Income Dist, Minimum Wage Etc

I wrote this a couple of weeks a go. Only today this appear on Malaysiakini letter. Been slack since then..
Too much TV..and a bit preoccupied with my listings on www.trademe.co.nz not that I am making millions..

Minimum wage for both foreign and local workers
Noor Yahaya HamzahAug 7, 07 6:22pm Adjust font size:

I refer to the letter Taxing rich to pay poor is daylight robbery.


Ideally, in a free labour market, free capital market and free goods market, everyone would be justly compensated, whether he is an entrepreneur, public/private servant or self employed.

Ideally, all who earn a living would chip in for the care and expenses of those who are unable to work, ie the incapacitated, the old and the very young. In one way or another.

In a civilised society like Malaysia, we elect a government to act on our behalf to do the things that we cannot do ourselves to attain a civilised society, ie defence, policing, taking care or the weak in society and fair distribution of national income.

Why are taking care of the weak in society and fair distribution of national income important? Because that is related to peace and rate of crime. If the rich are hogging a large portion of resources (read: wealth) and the poor are hungry, very soon the poor would just take (read: steal, rob) from the rich. 'What you don’t want to give, we will take.'

We have seen this from many ‘unrests’ and revolutions in history. No one came out the winner, neither the rich nor the poor.

Now back to the main theme of minimum wage. Ideally, I would 100 percent support legislation for a Minimum Wage Law. That is the first choice. Everyone should be paid at least a minimum wage, on ‘pro rata’ basis. I would go further to suggest that it is set on hourly rate basis. Just like in the Western Europe. There is nothing wrong in following a good example.

When I say everyone, it means just that, whether a local or foreign worker. I do not condone discrimination, and I loath to see rampant discrimination in my homeland Malaysia.

If the government is incapable or unwilling to do that, (what kind of government is this?) I would suggest setting a standard minimum living income/wage for at least for the Malaysian citizen. If the employer doesn’t pay the full amount of the minimum living wage, then the government shall top up the said worker's income.

Explanation? Our collective income as a nation (your wage, my salary, employers' profits, etc, totals national income) should be divided more or less equitably and fair to make everyone happy. If employers are unwilling to pay decent wages (because they want to trade profitably) then it would be fair that the government tax their profits to be distributed back to the workers.

This is not 'daylight robbery' but merely redistribution of resources (read: income/money) that the employer unwilling to do. That is the function of a decent government. I merely write about income top up, not full Negative Income Tax (NIT). If we implement full NIT, the bill would be horrendously high, and taxes would have to be much higher.

The easiest, most common method would be to implement Minimum Wage Law. If we care so much about our nation competitiveness, we simply have to lower our exchange rate and improve our efficiency. Minimum wage is about fair distribution of income, it has nothing to do with competitiveness.

Now, would 'pendatang tanpa izin' (illegal immigrants) flood the country? You see, they (these ‘pendatang tanpa izin’) come to work, because there are plentiful jobs. Jobs that pay a pittance (eg, RM10 a day for 12-hour day) that Malaysians don’t want to do. Who want to work for that much money? You are practically subsidising the employer.

If there is minimum wage of RM900 a month for 48-hour week (or RM4.20 per hour) millions of unemployed and underemployed Malaysians would be clamouring for available jobs, and the ‘plentiful jobs’ would soon vanish. Employers would take steps to improve efficiency (because of higher wages).

The spillover effect is that workers have more disposable income to spend in the country which would then improve the economy, which in turn will create more jobs.

As in the West, the government must make a rule that employers first look for local workers/talent first before employing foreign workers. The wages paid to either must be the same, no discrimination.

MInimum Wage Issue

One of my previous writing on this issue was in letter section of Malaysiakini. Everyone entitled to his/her opinion, so one Azhar wrote this.

Ideally, in a free labour market, free capital market and free good market, everyone would be JUSTLY compensated, whether he is an entrepreneur, public/private servant or self employed.
Ideally, all who earns a living would chip in for the care and expenses of those who are unable to work, ie the incapacitated, the old and the young. In one for or another.
In a civilized society like Malaysia, we elect a Government to act on our behalf to do thing that we cannot do ourselves to attain a civilized society. ie defense, policing, taking care or the weak in society and fair distribution of national income.
Why taking care of the weak in society and fair distribution of National Income important?
Because that is related to peace and rate of crime. If the rich hogging a large portion of resources (read: wealth) and the poor hungry, very soon the poor would just take (read: steal, rob) from the rich.
'What you dont want to give, we will take.'
We have seen many unrest and revolution in history. No one the winner, neither the rich, nor the poor.

Now back to the main title of Minimum Wage.
Ideally, I would 100% support the legislation of Minimum Wage Law. That is the first choice. Everyone should be paid at least the minimum wage, on prorata basis. I would go further to suggest that it is set on hourly rate basis. Just like in the Western Europe.
There is nothing wrong to follow good example.
When I say everyone, it means just that, whether local or foreign worker. I do not condone discrimination, and I loath to see rampant discrimination in my homeland Malaysia.

If Govt is incapable or unwilling to do that, (what kind of Govt is that?)I would suggest setting a standard minimum living income/wage, at least for our Malaysian citizen. If the employer doesnt pay as much as the minimum living wage, then the Govt shall top up the said worker's income.
Explanation:
Our collective income as a nation, (your wage, my salary, employers' profits etc totals National Income) shall be divided more or less equitably and fair to make everyone happy. If employers unwilling to pay decent wages (because they want to trade profitably) then it would be fair that Govt tax their profits to be distributed back to the workers. This is not 'daylight robbery' as Azhar claimed, but merely redistribution of resources (read: income/money) that the employer unwilling to do.
That is the function of a decent Govt.

I merely write about income top up, not the full Negative Income Tax. If we implement the full NIT, the bill would be horrendously high, and taxes would have to be much higher.

The easiest most common method would be to implement Minimum Wage Law. If we care so much about our nation competitiveness, we simply have to lower our exchange rate and improve our efficiency.
Minimum wage is about fair distribution of income, it has nothing to do with competitiveness.

Would 'pendatang tanpa izin' flood the country?
You see, they (pendatang tanpa izin) come to work, because there are plentiful jobs. Jobs that pay a pittance to Malaysians (eg RM10 a day for 12 hour day), that Malaysians dont want to do. (Who want to work for that much money? You are practically subsidizing the employer). If there is minimum wage of RM900 a month for 48 hour week (or RM4.20 per hour, millions of unemployed and underemployed Malaysians would be clamouring for available jobs, and the plentiful jobs would soon vanish. Employers would take steps to improve efficiency (because of higher wages).

The side effect is that workers have more disposable income to spend in the country which would improve the economy, which will create more jobs.

As in the West, Govt must make a rule that employers must search for local worker/talent first before employing foreign worker. The wages paid to either local or foreign worker must be the same, no discrimination.

Gee, I am tired, I want to go to sleep.

this article is from Malaysiakini.

Syed Shahir: Treat all workers as human beings
Su Hui Hsing | Jul 25, 07 11:32am





FIGHTING for a cause is definitely a long and arduous process laden with discouraging unknowns and grim prospects, the scariest of which is that all the hard work will be in vain. The odyssey of a trade or labour union is also, aptly put, laborious.

When Syed Shahir Syed Mohamud was elected president of the Malaysian Trade Union Congress (MTUC) in 2004, what the future held was unclear, but one thing was certain - that his task was to receive the baton from his predecessor and continue pursuing the unfinished business of the past.

The role of a trade union may be multi-faceted, but fundamentally, Syed Shahir fights for the rights of workers, who are prone to exploitation in a capitalist economy.

For MTUC, an umbrealla organisation that represents hundreds of trade unions and many times more workers nationwide, its role could be of an even higher order but the principle is still the same.

While the motivation for pursuing the rights could be political, social or economic, the one motivation that guides Syed Shahir is just to be human and sympathetic towards the helpless and hopeless.

"Human beings deserve to be treated like human beings. They should get what they deserve."

To him, it is as simple as that - upholding the dignity of his fellow human beings.

‘Most times are difficult’

While his 2004 victory was an encouraging milestone in his fight for his fellow workers, the journey has not been easy. His victory was not an easy one either. It has taken him persistence and five challenges for the presidency to be where he is today.

It seems like Syed Shahir will never be content with what he has achieved.

Asked when was the most difficult time during his work in the union, Syed Shahir said, "Most of the times have been difficult. To me, it is most difficult when you want to fulfill the wishes of your members. Other people might accept me and what I have done for them, but I cannot easily accept myself."

"For example, the dispute of the leadership of the National Union of Bank Employees was unresolved for many years. So when I took over in 2004, I promised that I would try to resolve the issue within three months. I failed within that period. It eventually took six to seven months. The moment you make the promise, until you resolve it, it is something that will tug at your heart."

In fact, Syed Shahir is now faced with a similar challenge.

Share of country’s rewards

He has been in the limelight a lot lately for MTUC's demand to the government to pass a legislation for a minimum wage of RM900 and a cost-of-living allowance of RM300 for workers in the private sector.

MTUC made it to the headlines lately for holding a nationwide picket for the cause. However, minimum wage is not a new endeavour that the congress has just undertaken. In fact, it started pushing for the policy eight years ago.

Two months ago, watching their counterparts in the civil service getting a rather hefty pay raise and anticipating the inflation that could possibly result, Syed Shahir and MTUC took up the challenge to step up MTUC's movement for the implementation of a minimum wage.

If anything, MTUC just wanted their workers to be able to enjoy a share of the rewards of the country's economic growth, which they have contributed towards, and have a form of social security in an increasingly expensive country to live in.

While he has been a unionist for more than 30 years, Syed Shahir's first encounter with unionism was rather indirect.

"I had several friends in KL then. I was helping them write up some articles and doing translation from English to Malay. So I got to know some friends who were in the trade union in 1972. The workers of an engineering company went on a strike so we helped them with translating some materials. There was a lot of industrial action at that time," said Syed Shahir, who hailed from Pahang, on his most remote but earliest involvement with union activities.

Syed Shahir was then working as a teacher on attachment. He then left the civil service to contest in the 1974 general election at the age of 21.

Now 55, Syed Shahir officially took on union activities when he became a member of the National Union of Transport Equipment Allied Industry Workers. He has been an active member of MTUC for about 15 years now.

‘Politics not interfering in my work’

Besides being a unionist, Syed Shahir is also a member of PKR, having been with PRM before it merged with PKR.

Syed Shahir dismissed arguments of his involvement in politics conflicting with his trade union movement.

He said, "Being in politics will not interfere in my work for MTUC. On the contrary, some causes pursued by certain politicians are in line with what MTUC is doing. We cannot impose our will on others. I believe in the free choice of a person. If I want to become a member of a political party, it's my choice."

On why unionists tend to be aligned to opposition parties, Syed Shahir said while the government protected the interests of investors and capitalists, unionists had to take a different position to support the workers. When he decided to support his members and oppose policies that are detrimental to the well being of the workers. He also stressed that there were members of the ruling party who were also involved in union activities.

In spite of the fact that the government has repeatedly expressed its disapproval towards the proposal, Syed Shahir and MTUC will relentlessly pursue the cause. Only three years after he took over the helm, Syed Shahir now faces the test of the burden that he was bequeathed with and hopefully, to bring it to completion.

Now, the time it will take for the government to give the nod to MTUC's minimum wage proposal, or whether it will give the much-desired nod at all, is still questionable. It may take months or years. It may not even happen during Syed Shahir's term as president. Nevertheless, he believes in laying the foundation for future generations to enjoy the fruits of the struggle.

The MTUC president added, "The struggle of any organisation will continue. Leaders come and go but the organisation remains. Only the speed and the phase will change."
SU HUI HSING is an intern with Malaysiakini.

Arbibi Ashoy; The Rich and the Poor

This writing in Malaysiakini letter
Rights of rich outweigh rights of poor
Arbibi Ashoy
Jul 23, 07 5:43pm Adjust font size:

I refer to the letter Taxing rich to pay poor is daylight robbery.

It is important to clarify that the MTUC is seeking a minimum wage legislation of RM900. The MTUC is not asking for better social welfare or cash handouts from the government. It is asking that people who do a job, deserve to be duly paid for their effort.

Social welfare is not the same as minimum wage as welfare is meant for certain categories of people such as the handicapped, the physically and mentally ill, the unemployable, the homeless, single mothers, the elderly and children. Thus minimum wage does not affect productivity and does not encourage laziness as some have accused. In fact, minimum wage makes hard work become more attractive as the benefits of remaining in employment actually increases.

The writer argues that salary should commensurate with qualifications and experience. So who gets to decide who deserves what? If companies are entitled to protectionism in the form of tariffs on foreign goods and curbs on the entry of foreign firms into Malaysia, shouldn't the employees of these companies be entitled to protection as well? Since the government protects the employer, why are the employees not deserving of protection as well?

The function of minimum wage is to prevent exploitation of workers by their employers. I find it disappointing that the Malaysian government has neglected the poor by denying them a minimum wage but is always willing to help the rich in the form of ‘bailouts’ and awarding them APs (approved permits).

The argument against the minimum wage is that it will deny some the luxury of having maids. Note that I have used the word ‘luxury’ because in my opinion, having maids is a ‘luxury’ but earning a decent living is a ‘basic necessity’.

So, Malaysia is a country where the rights of the rich outweigh the rights of the poor. Shocking still is the small minority of Malaysians who are willing to thwart the attempts of the MTUC to eradicate poverty simply because they have become too accustomed to their comfort zone.

I also disagree that taxing the rich is daylight robbery. Any facilities provided by the government for the poor also benefits the rich. These would include free healthcare (including major operations), free or subsidised education, free self-improvement courses, unemployment assistance, rent-controlled flats and houses, free library membership, legal aid, day care centres, an affordable and efficient transport system, free gyms, sports and recreational centres, free meals and textbooks for schools as well as government sponsored tuition and counselling for academically weak and problem students.

Tax is not ‘robbery’ if the money is put to good use and not splurged on wasteful mega-projects or if the money does not find its way into the pockets of politicians and their cronies.

Living on Minimum Wage in America

this story from AP.

Minimum wage increase to boost up some of poorest US workersWASHINGTON (AP): Fast-food waitress Fawn Townsend of Raleigh, North Carolina, knows exactly what she is going to do if her salary goes up with Tuesday's increase in the federal minimum wage: start saving for a car so she can find a second job to make ends meet.

"My goal personally is to get a vehicle so I can independently go back and forth to work and maybe pick up extra work so I can have that extra income, because minimum wage is not cutting it,'' said Townsend, who is 24 and single.

"Being a single person, you can't pay all your bills with one minimum wage job.''

Many lawmakers, along with advocates for low-wage workers, are celebrating the first increase in the federal minimum wage in a decade. Yet many acknowledge that raising it from $5.15 (euro3.73) an hour to $5.85 (euro4.24) will provide only meager help for some of the lowest paid workers.

About 1.7 million people made $5.15 (euro3.73) or less in 2006, according to the Labor Department's Bureau of Labor Statistics.

"The reality for a minimum wage worker is that every penny makes a difference because low-wage workers make the choice between putting food on the table and paying for electricity or buying clothes for their children,'' said Beth Shulman, former vice president of the United Food and Commercial Workers Union.

"Saying that, it's clear going up to $5.85 is not enough to really make sure that people really can afford the things that all families need,'' said Shulman, author of "The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans.''

Minimum wage workers will get an additional 70-cent boost each summer for the next two years, ending in 2009 at $7.25 (euro5.25) an hour. That comes to just above $15,000 (euro10,867) yearly before taxes for a 52-week work year.

Now, someone in such a job and earning $5.85 (euro4.24) an hour would bring home $12,168 (euro8,815) a year before taxes. The federal poverty level for singles is $10,210 (euro7,397), couples is $13,690 (euro9,918) and $17,170 (euro12,439) for families of three.

"In the wealthiest country in the history of the world, it is an outrage that anyone who works full time would still wind up in poverty,'' said Democratic Rep. George Miller of California, chairman of the House Education and Labor Committee. "Everyone who puts in an honest day's work should receive a fair day's pay.''

Poverty and the minimum wage are becoming a major issue in the Democratic presidential race. Former North Carolina Sen. John Edwards and Sen. Barack Obama of Illinois are emphasizing raising the minimum wage during their tours of impoverished areas.

Edwards, who said he wants to eliminate poverty within a generation, favors raising the minimum wage to $9.50 (euro6.88). Obama is advocating a "living wage'' that would go up as inflation rises and he has promised to eliminate the phrase "working poor.''

More than two dozen U.S. states and the District of Columbia already have minimum wages higher than the federal one. Even in those states, an increase in the federal minimum wage probably will have a ripple effect, increasing the salaries of Townsend and others.

North Carolina raised its minimum wage from $5.15 (euro3.73) to $6.15 (euro4.46) in January.

"It's a long overdue first step,'' said Cindia Cameron, the national organizing director of 9to5, the National Association of Working Women. Minimum wage workers typically are young, single and female and are often black or Hispanic.

Even then when the full increase is enacted, minimum wage workers will be just scraping by. "It's not enough money to meet your basic needs, I'm talking about your rent, your gas, and gas to get back and forth to work,'' said Sonya Murphy, head organizer of the Mississippi Association of Community Organizations for Reform Now, or ACORN.

But at the same time, employers who pay many of these low-wage workers say increasing the minimum wage only means they have to raise the prices of the products, cut back on employees' hours or let some workers go.

"When you go into the grocery story now, you may be checking your own groceries, you may be bagging your own groceries,'' said Jill Jenkins, chief economist for the Employment Policies Institute. "All of these things are because of mandated wage hikes. When you have to pay more, employers begin to find other options to keep costs down.''

According to the National Restaurant Association, the last minimum wage increase cost the restaurant industry more than 146,000 jobs and restaurant owners put off plans to hire an additional 106,000 employees.

At $7.25 (euro5.25) an hour, the most likely response from restaurants will be "increases in menu prices, elimination of some positions and reduction of staff hours to try and offset some of the increased labor costs,'' said Brendan Flanagan, the association's vice president of federal relations.

Others say the effect on the economy will be negligible.

A PNC Economic Outlook survey done in April showed three out of four small- and middle-market business owners said raising the minimum wage would have little or no impact on their businesses. "In a tighter labor market, they already raised wages to be competitive,'' said Stuart Hoffman, chief economist for PNC Financial Services Group.

Syed Husin Ali on minimum wage

Dont let the issue buried under apathy and 'what can we do' attitude. Keep it up, for the welfare of millions of Malaysians are at stake.
Malaysiakini and sometimes Malaysia-today have articles and reports on this, but other paper...

13/07: Government rejection of minimum wage
[print] Category: General Posted by: Raja Petra
It is most disappointing that the Government (through the announcement of a Deputy Minister) has summarily rejected the suggestion by MTUC for minimum wage to be introduced in the private sector. But we should not be totally surprised, knowing the government policy and whose interests it normally protects.

Actually, MTUC has consistently requested for minimum wage to be introduced across the board, but the government rejection seems to be confined only to the private sector. Although the government has raised salaries and allowances for government employees, it has not committed itself to the idea of minimum wage for the pubic sector workers.

Be that as it may, the rejection announced by the deputy minister shows that the government really does not have the plight of the low income workers close to its heart. Surely the government knows that workers who would be affected by a minimum wage bill would be Malay.

About a third of the Malays employed are at the bottom of the occupational hierarchy. If the government is really serious about closing the inter-ethnic income gap, an effective way to do so would be to see that those at the bottom get better income – not screaming and shouting about shares in companies and ownership of commercial buildings.

One wonders why the government is so concerned about the views of big business, especially foreign investors, on the minimum wage issue and not, for example, on mandated shares in companies when it comes to it. Why is the government so solicitous over the privileges of the few, but not on the plight of the millions? In addition, what evidence is there that foreign investors come here because of wages? If low wages were a major concern, how come foreign investors are not rushing to Indonesia in droves?

The government must reveal to the public how many workers make less that RM900 per month, and how many make less than RM750 a month (the approximate poverty line income for a household). In other words, we need to know how many workers would actually be affected by minimum wage. Government policy and decision must be based on hard evidence.

The government argues that small enterprises cannot afford the minimum wage requested by MTUC (RM900 basic and RM300 cola). Three questions arise from this argument, namely: (a) does the government know how many there are and what proportion of the total employed are in them, (b) whether such low productivity and low wage enterprises contribute significantly to the country’s development and if it is more beneficial in the long run to allow them to continue, and (c) if it is necessary, what kind of mechanisms can be adopted to help them survive.

Actually, the argument that small enterprises will be adversely affected by minimum wage provides excuse and cover for the government to protect the interests of big and giant companies, both local and foreign-owned. What is stopping the government from ensuring that these companies accept minimum wage? It is public knowledge that these companies instead prefer migrant workers who can be paid lower than local workers.

Regarding foreign workers, the Deputy Minister has inadvertently let the cat out of the bag. The government has always claimed that foreign workers are only employed here on the same conditions as local workers, and that foreign workers are not being used to keep the wage rate down.

Now, the minister objects to a minimum wage rate as it would mean that foreign workers would have to be paid the same as locals. So, the government has all along been lying, and their lies have meant that the labour market in his country has been distorted by import of foreign workers to deliberately keep down the wage rate.

Over the past 25 years, the share of wages in value-added in the manufacturing sector has dropped from around 30% to around 20%. This means that workers have not gotten their share of the increase in productivity as measured by value-added per worker. This is one reason for the increase in inequality in the country. Do we wish this inequality to increase and threaten political stability and national unity?

The government as well many who share its view warn that minimum wage will jeopardise the country’s economy. This is unlikely to happen if it is combined with policies that encourage a shift to higher productivity sectors. This is what the government all this time has failed to consider and implement.

Dr Syed Husin Ali
Deputy President
People’s Justice Party
(keADILan)

Minimum wage demand gets the boot

I am referring to this report in Malaysiakini that the Govt would not legislate for the minimum wage law.
That is dissapointing, why even China has minimum wage law, read here. Shenzen in China has minimum wage law of USD$106, equivalent to RM365 per month. Imagine that, some of us Malaysian got paid less than workers in China. Keep it up, and soon Chinese companies would relocate to Malaysia for want of cheap labour.

However, our Minister Fong said that "companies with strong union representation should be allowed to negotiate better wages". That is fair, but has our union busting rule/law have been amended to allow for umbrella nationwide unions for workers? Not as far as I know. So that is a dry statement, meaningless in other words.
Minister Fong also said, “They can get more than RM900, so why should we determine there should be that level?”. Link here.
I think our Minister misunderstood that minimum wage means just that, minimum allowable wage. Any employer can pay more, much more if they want to. Just that employer should not pay wages below the minimum wage rate. Who is stopping them paying more? Duh.

So the Govt is saying that the presence of 1.5 million foreign workers, legal or illegal is stopping them from adopting minimum wage law?
What economic model are following here?
Model 1: Saudi Arabia has 6 million guest workers, yet the unemployment rate amongst its citizens is about 30%. Saudi citizens do almost nothing even in their own homes, they employ maids, drivers and workers to do menial jobs, and also professional jobs. Yes they go for jobs like doctors, engineers and teachers but that leaves most of the population unemployed.
I can see it happening in Malaysia already. We employ foreign workers to do menial jobs and give them low pay, such that the well off Malaysians dont want those kind of jobs. In doing so, we forget that our less well off citizens are deprived of the chance of securing better wages to improve their lives and share the prosperity of the country.
There is one difference between Saudi Arabia and Malaysia, that is in Saudi Arabia they have safety net, meaning social welfare payment for the unemployed and the poor. So what level of welfare payment are we planning to pay for the unemployed?
I dont believe that employing millions of foreign workers, letting thousands of Malaysians go unemployed and paying them dole is a good model.

Model 2: European countries has minimum wage law, same rule of minimum wage whether you are guest worker or citizen. Most countries has laws against employing illegal immigrants. Employers are not allowed to discriminate on the basis of colour, gender, religion etc. Everyone is treated equally, well at least in the eyes of the law.
So if we follow this model, and legislate minimum wage law, everyone, whether foreign worker of not should get at least minimum wage, no discrimination.
If we take this European countries model, employers would not have preference for foreign workers. Lets admit the facts that some employers prefer foreign workers because they are cheaper to employ than Malaysian workers. You can hire and fire them at will, treat them badly, assault them and maybe cheat them off their due wages (we read this in the paper sometimes).

Isnt it amazing that that our Govt want to continue this to go on? I am dissapointed with our elected representatives.

Is Low wage = competitive?

I have written about Minimum Wage in Malaysiakini a couple of times. Here is a report in Malaysiakini.
Here is an interesting theory put forth by no less than our Human Resources Minister, one Datuk Seri Fong Chan On.
'He said that if the Government were to comply with the demand, the country would lose its competitive edge.'
His theory said that if Govt set minimum wage at RM900 a month, Malaysia would lose its competitive edge.

More or less he is implying that "let the workers eat grass, so that the ruling class can eat cake, drive Mercs and live happily ever after".
That sounds like Marie Antoinette isnt it? When she was informed that the poor working class dont have bread to eat, she retorted, "let them eat cakes instead".

Let us inform our beloved Minister that our workers are practically eating grass already.
We are more or less an open economy.
We import our needs, food, clothing and lately (for the past 20 years) labour force, and to earn our way, we export electronics, services, palm oil and sand (to Singapore) and lately land titles (IDR).
Our ringgit has been fixed until lately, when it was floated because China gave up fixing the Yuan to the dollar (after so much pressure from USA).
Competitiveness is the SUM of all things that we do better than others.
Competitiveness has nothing to do with paying RM300 per month for our factory workers. Yes its true that our factory workers get paid that low, wages that not enough to buy food for one person more than a week.

Let me digress a bit.
During the economic crisis of 97, what did Govt do to regain competitiveness?
Answer: Devalue the ringgit.
The ringgit was free floated then, so when everyone including our own corporations sold ringgit, we let the value fall.
Other countries did the same thing, South Korea let their Won fall, so did Indonesia.
One China's territory (Hong Kong) maintained their dollar value, as a result prices falls. Real estate prices fall, people lose jobs and some companies close shop.
What does recent rises in the value of ringgit vis a vis USD tell us?
Answer: The flow of funds into USA is slowing down.

Let me tell our Human Resources Minister, that to maintain and improve competitiveness we must continue to invest in our human resources capital, as well as our financial and infrastructure capital.
By keeping our workers wages low, our companies would choose to employ more workers to increase production instead of improving efficiency and get better return per capita. Workers would have to work longer hours to keep up with the rising cost of living. ie workers would have to work longer and harder instead of smarter.
As such we dont move up economic ladder.

Let me make it clear, this issue (minimum wage) is not about competitiveness. Minimum wage is about fair distribution of income between owner of capital, managers and workers. Its about social justice.
Workers are only demanding fair wages, wages that pay for a decent living.

This report from The Star
Drop demand for RM900 minimum wage, MTUC told

By SARBAN SINGH

SEREMBAN: The Malaysian Trades Union Congress should be practical and drop its demand for a RM900 minimum wage for all private sector employees, said Human Resources Minister Datuk Seri Fong Chan Onn.

He said that if the Government were to comply with the demand, the country would lose its competitive edge.

“Let’s be reasonable, we cannot allow our economy to be too rigid,” he said, adding that a blanket ruling could not be applied to workers in all sectors.

Dr Fong said the Government was prepared to discuss the matter with the MTUC but adopting a confrontational approach would not benefit anyone.

Yesterday, the MTUC organised one-hour pickets at several locations in the country. The biggest was held outside the EPF headquarters in Jalan Raja Laut in Kuala Lumpur in which some 1,000 workers participated.

Apart from the minimum wage, the MTUC is also demanding a RM300 cost of living allowance (Cola) for private sector workers.

“If we have a minimum wage of RM900, we would have to pay foreign maids as well as part-time workers the same amount. We can’t do that for everyone,” said Dr Fong.

The minister, however, admitted that a minimum wage could be introduced for workers in certain sectors such as dock workers and cargo handlers.

The minimum wage for most other sectors should be left to market forces, he said.

On a separate matter, Dr Fong said Socso paid out close to RM1bil in compensation, pension and survivors’ benefits to workers or their dependents last year compared with RM890mil in 2005.

However, it managed to collect RM1.5bil last year compared to RM1.3bil in 2005.