KUALA LUMPUR: Wages in Malaysia must grow at an inflation adjusted annual average of 3.5 per cent for the country to achieve high-income status by 2023.
Alliance Bank Malaysia Bhd Chief Economist Manokaran Mottain said at present, the average wage growth in the country was at 2.4 per cent, weighed on by an abundance of foreign labour.
“To elevate wage growth, you need to address foreign labour. Reduce it and I’m sure wages will go up,” he told reporters on the sidelines of the 2019 Malaysia Economic and Strategic Outlook Forum here today.
He said there were roughly over two million foreign workers in the country currently and the number could easily reach four million if a thorough calculation was made.
Apart from reducing foreign labour, he said the government should also focus on the creation of highly-skilled jobs that provided a higher income.
He said highly-skilled jobs only constituted 25 per cent of the workforce in Malaysia as compared to 50 per cent in the United States.
“We need more initiatives from the government. I hope it can look into more incentives to transform the Malaysian job structure from low skilled to highly-skilled or even technological oriented,” he added.
On economic policy, Manokaran said he hoped the government would come up with policies that can stimulate the economic environment by May this year.
Meanwhile, during the panel session, Malaysian Rating Corporation Bhd’s (MARC) Chief Economist Nor Zahidi Alias said he believed the government was still looking at ways to generate additional revenue.
“By comparison with other countries, we are rated ‘A’ by S&P, Moody’s and Fitch Ratings (agencies), and when compared with other single ‘A’ countries, our revenue is lower.
“If you look at how the government is going to do it, of course it is by either (introducing) new taxes or probably widening the scope of the SST (Sales and Services Tax).
“I think there are things in the SST which have not yet been covered. If the government cannot increase the (current) tax or introduce new taxes, they are going to widen the SST,” he added. – Bernama
