Minimum Wage Issue

As I said in my long ago postings, Minimum Wage is about EQUITY and ability to bargain. Those who have the much sought after skills would be able to extract most from the economy, ie get better pay. While those who are unable to bargain forcefully, or whose skills not highly valued, ends up with crumbs.

Role of a Govt is to enact laws that provide JUSTICE, EQUITY and FREEDOM for its citizens.

MINIMUM WAGE is about EQUITY.

You judge for yourselves, if the performance of Malaysian Government if dismal at best, or a total failure.

HARSH WORDS, but someone has to say it.

I have cut and pasted this letter from Malaysiakini.

Minimum wage now!
Michelle Lee | Dec 4, 08 4:15pm

I refer to the Malaysiakini report No minimum wage as yet.

Like many comfortable desk-bound employees, I often take for granted that there is no pungent smell of unwashed toilets floating around in the office. I take for granted that the dustbin in my room is emptied daily.

And mostly, I take for granted the men and women who are as essential to the company, as the managers, the supervisors, the officers and the clerks.

I was chatting with Kak Nur last week, at the end of a long day. I knew she worked two jobs, one as a cleaner with the company during the day, and the other making sushi during the night.

For her labour in the two jobs, totaling an ungodly 15 hours a day (enough to make any grown man faint from exhaustion) she takes home RM900 a month: RM600 from the day job, and RM300 from the night job.

I assumed she was unmarried. Who would have time or energy left? But I was wrong. She had three children. The youngest was just a year old. And to top it off, her husband had just left her six months ago, which was the driving reason for her taking up the second job.

I wanted to empty my bank account for her, but I knew that could not be the answer. The poor do not need perpetual hand-outs that make us feel good about ourselves, but which do nothing for their next generation, and the generation after them. We need policies that work for them.

One such policy which I believe is long overdue, is a minimum wage framework. Because when we allow private companies to pay pittance, we demean the work of another’s hands. By allowing it to go on for as long as it has, we have inevitably demeaned their personhood.

And we continue to scorn their dignity by saying that they are not worth that much. We say to them that they are negligible. That they are of little, or no value at all.

This is happening right here, in a multi-national company in the heart of Kuala Lumpur. I know for a fact that this is being replicated a thousand times over here in the city, and a hundred thousand times over in the rural areas, where plantation workers, tea leaf pickers and rubber tappers break their backs and give their lives for less than RM500 a month.

Minimum wage is not an ‘ideal policy’. It is a necessary policy that must be put in place to act as a check and balance on capitalism, which if left unregulated will and has manifested into uncontrolled greed, where the poor cannot afford a RM3.50 meal, and the rich pay RM200,000 for a two-seater sofa set.

So I say to this government and to the human resources Ministry, gor goodness’ sake, if you want to regulate something, regulate the right things. Impose a minimum wage now, because relying on the conscience of Big Business isn’t going to take the thousands of Kak Nurs out there very far.

And please, stop mouthing ridiculous statements like ‘Implementing minimum wages is not feasible’. Not feasible for whom? The Federation of Malaysian Manufacturers? The Malaysian Employers Federation? I don’t think Kak Nur would have a problem with it though.

Finally, to you, the populace, who sit comfortably in your swept rooms. The tea-lady and the cleaner whom you meet everyday, her labour is as essential as yours is. Do not demean him or her by remaining silent.

Jerit, an NGO that has been petitioning for a minimum wage since the 1990s, recently launched a cycling campaign starting from Alor Setar and which will culminate in the handover of a memorandum to the prime minister on Dec 18.

Their goal is to raise awareness on the need for a minimum wage policy along the way. If you can’t cycle, go adopt a cyclist now.

Each of us can only do so much by giving hand-outs to individuals. One voice alone, while good, may not be as effective. As history has taught us, our government is a little hard of hearing. It took a collective jerit on March 8 to (hopefully) knock some sense in.

What is now needed is another jerit for those with no voice, a jerit for the implementation of a necessary policy to empower the poor, and to restore their dignity by affirming the worth of their labour.

Minimum Wage Rise to $12 per hour

Malaysian politics still in a flux, not settle yet. The latest news is about Pakatan Rakyat. If its true tha PAS-PKR-DAP can put their heads together, and work for the sake of Malaysia instead of the narrow idealogies where they come from, that would be good.
So I support this Pakatan Rakyat thing.

I suppose before we can talk about steps and laws that would be formulated for better Malaysia, we must form the government first.

Then we can talk about such issues like minimum wage etc.

Minimum wage rise positive, but unions want more
By CLIO FRANCIS - Stuff.co.nz | Tuesday, 01 April 2008



Today sees the introduction of a new minimum wage and the abolishment of youth rates, however union officials believe that the changes are not enough to lift New Zealanders current living standards.


The April 1 change entitles all adult employees to $12 an hour and sees the end of youth rates, in favour of a new entrants minimum hourly rate of $9.60.

Green Party MP Sue Bradford - who sponsored the Minimum Wage Amendment Bill in 2007 - welcomed the abolition of youth rates, but believed that income rises were still to low.

"The fairest thing a socially responsible Government could do is to increase the minimum wage to at least $15 an hour and raise benefits to levels people can actually live on in 2008, rather than leaving people to sink deeper and deeper into debt and homelessness," the Minister said.

Council of Trade Unions president Helen Kelly said that while there was clearly more to be done to lift New Zealanders living standards, the minimum wage raise today show we are going the right way.

"Nine years through the eyes of the workers has seen steady improvements to the social wage," she said.

"The CTU wants to see more progress, with better pay for low waged workers and stronger public services, not cuts to them."

Minister of Labour Trevor Mallard today urged all employers to ensure they start paying their youth workers the new adult minimum wage providing they meet the criteria.

The Minister said that change reflected a marked increase for youth workers, with the new figure amounting to eighty percent of the minimum adult wage.

"It comes with the move to entirely scrap the youth minimum rate and replace it with a new entrants minimum hourly rate of $9.60 an hour for 16 and 17 year olds for the first 200 hours or three months they work. After this period, the 16 or 17 year old must be paid the adult minimum wage.

"From April 1, the adult minimum wage will also rise to $12 an hour, from the current $11.25 rate - meaning our government has delivered on our promise of raising the minimum wage to $12 an hour ahead of time," said the Minster.

Unite Union General Secretary Matt McCarten believes that while the wage change is a move towards a fair wage for working people, the reality is that it is still not a sustainable amount of money.

"While getting rid of youth rates and increasing the minimum wage to $12 are two important victories, we will continue to push towards a $15 minimum wage for all as our next goal," he said.

Minimum Wage Act debate malaysiakini

an issue that is ongoing.

Workers suffer without Minimum Wage Act
S ArutchelvanApr 9, 07 4:11pm
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We refer to the letters Najib, you're wrong on minimum wage and Minimum wage not a cure-all.
When the Coalition of Factory workers and Unions (Jerit) and MTUC call for a Minimum Wage Act, they are, in fact, talking about a decent minimum wage which can guarantee a decent standard of living for the poor. One must understand that market forces do not determine that workers are taken care of. The capitalist will continue to go for cheap labour or bring in foreign workers – with documents or without. Capitalists do not have any loyalty to the country they are in - their loyalty is only to profit. State intervention would assist the workers and it is the role of the state to protect its people. In Malaysia, privatisation and neo-liberal policies ensure that people are made to pay for everything that at one time they were enjoying for free. The state has slowly and surely washed it hands of its social responsibilities. Without a Minimum Wage Act - whatever the economists say - workers would suffer and this in turn would mean that society would also suffer.
If we believe in equality, justice and fair play, then we would set a minimum wage and narrow down the income disparity between the rich and the poor in Malaysia, which is one of the highest in Asia.
The writer is pro tem secretary general of Parti Sosialis Malaysia (PSM).

Minimum Wage issue

Title: Minimum wage is about providing decent income for the workers.

I refer to the letter Minimum wage not a cure-all.
In short, Rajan claims that by legislating minimum wage, unemployment would increase and the minimum wage law would hurt the very group it is designed to help. That would be true if we set minimum wage at a high rate.
Labour cost is only a portion of total cost of production of good and services. Capital cost, patent, licensing and transportation are some of the factors influencing total cost of production. We should concentrate of moving up the economic ladder, investing more in capital hence improving labour productivity. Instead of competing in terms of labour cost, the lowest unskilled labour cost I might add, we should compete to reduce capital, bureaucracy and transportation costs, the other factors of production.
For example, lowering the cost of capital (lower interest rate) and simplifying bureaucracy go a long way towards improving business profitability and our country’s competitiveness.
We, as citizens of a country, refrain from concentrating wealth to small select group of citizens, and try to reduce the gap between rich and poor. Minimum wage law is just a small step toward this. Its about providing decent income for our workers. Its about preserving self esteem, that everyone’s contribution is valued in our society. Its about projecting the message that no one is being disenfranchised in our society. Its about social justice.
Not so long ago I read a report in Malaysiakini about the bonded labourer (another term for slavery) at some palm oil estates in Pahang. Even though people are supposedly free to seek higher wages ‘elsewhere’, for some people, this is not possible because the barriers are too difficult to overcome. Problem with housing, language barrier and identity card etc. Should we just leave them making RM200 a month even though they work 10 hours a day 6 days a week and let their employer rake most of the profit?

Opponents to Minimum Wage are typically from elitist and bourgeois background, who may study at ‘elite’ and ‘prestigious’ SMU, their dinner spending may equivalent to a month’s wages of the lowest income group. Yet they scoff the idea of paying more to their fellow countrymen who work at the same establishment where they eat.

Last week Chinese Govt began cracking down on foreign firms who pay their employees below minimum hourly wage of USD0.73 equivalent. About RM2.52 per hour.

Milton Friedman proposed Negative Income Tax (NIT) during Nixon era, but he opposed it when Congress was going to implement it was packaged with other measures. Yes, Milton Friedman opposed NIT!
NIT requires considerable reporting and supervision, bureaucracy in another word. It provides Guaranteed Minimum Income (GMI), which provides money to survive on.
If survivable income in Seremban is RM500 per month (just enough to pay room rent, food, power and water) then GMI should be RM500. If Rajan is working 10 hours a week and get RM3 per hour, then he should get top up of RM365. Fair enough, but this doesn’t encourage Rajan to seek full time employment, since any amount he earn, as long as its below RM500, he will get RM500. So he might as well work less.
Technically employers could pay wage of RM0.50 per hour (remember, there is no minimum wage), and it still doesn’t encourage the workers to seek other employment. Workers would be happy getting their survivable income and stay in their jobs, companies raking huge profits but the government and taxpayers would be saddled with ever increasing wage subsidy. This would result in higher and higher tax rate for the taxpayers. Sure there would be no unemployment.
I don’t think this is the path we are after.
In Western countries, Minimum Wage is complemented with Guaranteed Minimum Income, in such a way that it encourage the unemployed to seek and gain employment. Even the fabled free market USA has Minimum Wage Law in place.

Minimum wage in Malaysiakini reply

Minimum wage not a cure-all
Rajan RishyakaranApr 5, 07 3:44pm
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I refer to the letter Najib, you're wrong on minimum wage.
Noor Yahaya did point out accurately the direct effect of minimum wage - companies that can't afford it go under (or less dramatically, lay off their workers) while others switch to more capital intensive production.
But rather than increased efficiency as Noor Yahaya claims, the direct cause of this is unemployment - not ‘freeing labour resources to be employed elsewhere’. If ‘elsewhere’ could exist after minimum wage, it already does now. And labourers can freely go to this ‘elsewhere’.
The minimum wage, according to Noor Yahaya, would encourage capital intensive production. He gave the example of retrenching road sweepers for one driving a truck. This highlights the problem with minimum wage - road sweepers would be unemployed. And production shifts to capital only because the price of labour (road sweepers) increased; not because the cost of capital (trucks) reduced. This increased cost would be passed on to the consumers (which may include those retrenched road sweepers).
Noor Yahaya brings in another ‘benefit’ of minimum wage - those refusing to work under the hypothetical minimum wage would enter the labour market. This exacerbates unemployment - more supply (labour), less demand (jobs). The writer also ignores the existence of jobs that pay more than RM5. Additionally, those retrenched road sweepers would be competing against those very people Noor Yahaya claims would enter the market.
This after Noor Yahaya claims the poor may not have the ‘gift or ability’ for education – how then are the retrenched road sweepers going to compete? Far from increasing efficiency, minimum wage causes even more problems in the end. And there are other ways to guarantee a minimum income – Juliet Rhys-Williams and Milton Friedman's Negative Income Tax, for example.