Go for decent living wage policy

G Vinod
June 11, 2011

Compared to a minimum wage policy which is a short-term remedy, a decent living wage will ensure workers' wages are on par with current economic reality.

PETALING JAYA: A decent living wage policy should be the way forward for governments in Malaysia, Indonesia, Thailand, the Philippines and South Korea to give workers better security.

Several trade activists from these countries said it was high time that the respective governments scrapped the minimum wage policy and implement the decent living wage policy.

At a roundtable conference here, they said that a decent living wage policy would help workers cope with the economic realities of their respective countries in real time.

Also present were Klang MP Charles Santiago and Parti Sosialis Malaysia (PSM) secretary-general S Arutchelvan.

The Philippine National Wages and Productivity Commission deputy executive director Patricia Hornilla said that a decent living wage has a more holistic approach in addressing workers’ needs compared to a minimum wage.

“A decent living wage will ensure a worker has funds for savings and investing in social security schemes,” said Hornilla.

She added that such a salary scheme would take into consideration the workers’ dependants such as their immediate family members.

However, Hornilla said it was important that all parties involved in implementing the policy – the government, employers and employees – come to a mutual understanding.

She said that the parties could come up with clear criteria on how the wages should be adjusted from time to time.

“This will help employers be prepared. It will also deter employees from having unrealistic expectations over their wage adjustments.”

She also said that employers should not argue about productivity when it came to addressing the basic needs of their workers.

“Productivity should only be taken into consideration when considering increments,” she said.

Lack of political will

Thailand’s Arom Pongpangan Foundation-Labour Resource Centre director Bundit Thanachaisethavut said that unlike a decent living wage, a minimum wage only served to protect those who were fresh in the workforce for a certain period of time.

“But a decent wage policy takes into consideration cost of living, skills upgrade and sustainability,” said Thanachaisethavut.

However, he said that the new policy could only materialise if the unions were strong.

Santiago agreed that a decent living wage scheme was the way to move forward in these current times.

“In many countries, the minimum wage is set even below the povery line. However, a decent living wage will ensure the worker has money for food, non-food items and savings,” he said.

Santiago said the new policy would automatically ensure the workers receive a wage above the poverty line.

Asked whether the unions would face opposition from employers over the new plan, the DAP MP said currently there was a lack of political will in addressing the workers’ wages.

However, he said that although initially employers might find it tough to implement the new wage policy, they would benefit in the long run.

“With higher purchasing power, people will have means to buy more goods which will eventually be beneficial to our economy due to higher domestic consumption,” Santiago said.

The government is set to table the National Wage Consultative Council Bill when Parliament begin its sitting on Monday.

Human Resources Minister Dr S Subramaniam said the council would be empowered to make recommendations on workers’ wages once the Bill is passed.

According to a World Bank report, about 34% of Malaysians earn wages below RM700, which is below the Malaysian poverty line benchmark of RM720.