KUCHING: It is important that the welfare of Malaysia’s labour force is well preserved, if not enhanced, in heading towards an innovation-driven economy, said Malaysian Trades Union Congress (MTUC) Sarawak secretary Andrew Lo.
He pointed out that this is to ensure workers continue to be properly incentivised to raise their productivity, thus achieving greater value creation in the economy.
“The traditional argument that we can only justify increases in wages if productivity grows, has been debunked.
“We must turn this argument on its head by empirical evidence that raising the wage floor could help drive up productivity, by encouraging employers to invest.
“This demonstrates the urgency to institute major reforms to labour legislation including the Trade Union Act, before the problem gets so much worse,” he told New Sarawak Tribune when contacted on Tuesday (July 26).
He was asked for opinion in regard to the remarks by Prime Minister Datuk Seri Ismail Sabri Yaakob who expressed disappointment with the salaries offered by employers which are not commensurate with the qualifications and work done by locals.
He also said wages constitute only 36 per cent of Gross Domestic Product (GDP) compared to 45 per cent to 55 per cent of other countries.
“It is highlighted that Malaysian workers receive lower compensations relative to their productivity and equity perspectives.
“First, Malaysians are paid a lower wage compared to benchmark countries, even after taking into account productivity differences. Second, Malaysia has a lower labour share of income despite its labour-intensive nature.
“This suggests workers are not adequately compensated for their contributions,” said Lo.
