Malaysia to introduce new minimum wage by 2018 to bridge income gaps between East and West

Reuters

In light of pleas made by East Malaysians to address the high costs of living, the Malaysian Human Resource Ministry announced on Oct 12 that a new minimum wage is set to be finalised by mid-2018.

Its minister, Datuk Seri Richard Riot Anak Jaem, spoke at a press conference held yesterday (Oct 12) and told reporters the move aims to bridge income gaps between those living in the East and Peninsular Malaysia.

He said that officers in the National Wage Consultative Council (MPGN) have begun to review the Minimum Wage Order 2016 and analyse if the move to introduce a new minimum wage is feasible and beneficial.

Addressing why the income gap exists, Riot said in a quote by The New Straits Times: “The main reason for the income gap is the median wage, which is the difference in employers’ capability and capacity in both parts of the country, to pay wages to their employees and that’s why the minimum income is lower in East Malaysia.”

Earlier in his speech, he said that the MPGN’s 2011 Act stipulated that the Minimum wage Order should be reviewed at least once every two years.

In the last two wage reviews conducted, Riot said the government has been successful in narrowing income gaps but are working towards the eventual goal of standardising wages throughout the country.

In a report by The Malay Mail Online, he said: “Previously, the minimum salary in Peninsular Malaysia was RM900 ($213) while in Sabah, Sarawak and Labuan, it was RM800.

“In 2016, we closed the gap to RM1,000 (Peninsular) and RM920 ( Sabah, Sarawak and Labuan).”

Prior to his speech, Riot presented appointment letters of 25 members of the MPGN and for the first time, two members from Sabah and Sarawak were appointed to the council.

I hope with their appointment, workers in East Malaysia will have better representation,” he said, in a report by The Malaysian Digest.

The members will hold office from Oct 1 to Sep 30, 2020, to study, review and advise the government on minimum wages for those in the private sector.