Key findings from Malaysia's new National Wage Index

Malaysia's Human Resources Minister M. Kulasegaran yesterday launched the National Wage Index (NWI) which measures changes in wages and salaries of workers in the local labour market.

Kulasegaran noted that the NWI, the first in the country, was one of the 11 labour market consolidation initiatives under the 11th Malaysia Plan (11MP) in the priority areas of increasing productivity, enhancing job creation and raising the salary structure, Bernama reported.

Speaking to reporters after the launch, he said employers could use it as a guide for setting pay levels for salary adjustments and as input to their HR policies. “Employees and job seekers could benchmark changes in their wages to broader labour market trend and to assess their wage increase or changes over their career paths,” he added.

Separately, Kulasegaran said the government would focus on increasing the participation of women, retirees above 60 years of age and disabled persons as the prospective workers in the labour force. He added that the government would study Singapore's model to allow retirees to work again.

Key findings from the National Wage Index

The NWI was developed by the Institute of Labour Market Information and Analysis (ILMIA) based on quarterly surveys on payroll information and adjustments between September 2016 until June 2018. It is a combined index of both the private and public sector wage and salary changes.

Key findings from this first volume included:

• Overall basic wages (private sector + public sector) grew by 8.2% between September 2016 and June 2018.
• Basic wages grew faster in the private sector when compared to the public sector (8.3% in the private sector compared to 7.8% in the public sector).
• By region, overall basic wages (private sector + public sector) rose more in Peninsular Malaysia (8.6%) than in Sarawak (6.6%) and Sabah (5.4%).
• In the private sector, Basic Wages Index (BWI) in Peninsular Malaysia saw the highest increase (8.8%), followed by the major urban areas of Sarawak (6.0%) and Sabah (4.8%).
• In the public sector, BWI saw the most growth in Sarawak (8.3%) compared to Sarawak (7.8%), and Peninsular Malaysia (7.7%).
•  In the private sector, across the five main economic sectors, the highest increase in BWI was in the service sector (10.2%), followed by the mining sector (8.2%). The plantation sector registered the lowest BWI increase of 1.7%.
• Across major occupational groups, the NWI rose between 0.6% and 13.8% over the eight quarters.
• In the public sector, wages grew generally more in the upper end of the occupational structure than at the lower end. The BWI for managers and professionals (public sector) rose 7.8% and 8.1% while it rose only 6.8% for elementary workers.

The full NWI can be downloaded from the Institute of Labour Market Information and Analysis website.

Photo / ILMIA