MEF on TVET minimum wage: "We shouldn't regulate wages this way"

In response to suggestions to raise minimum wages for technical and vocational education training (TVET) workers and university graduates, Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan said such regulations will disrupt the market wage structure and burden employers, Free Malaysia Today reported.

"We shouldn’t regulate wages this way. We will end up killing market rate wages and put a strain on a company's finances," Shamsuddin said.

Explaining his stance, he told Free Malaysia Today: "For TVET workers, RM3,500 is way above market rate. Any rate beyond a country's minimum wage should be determined by market forces."

He pointed out that the current market starting rate for TVET workers was between RM1,800 and RM2,200, while degree holders are getting between RM2,000 and RM2,500, and those with a masters can get about RM3,500.

Noting that people should not be too fixated on starting salaries, he said: "In Malaysia, employers do give increments so you won’t be stuck with your starting salary for the next 10 years."

Shamsuddin went on to explain that in Malaysia there is a starting pay as well as a maximum pay, adding that if employees showed their bosses that they could perform, there is no reason why a company wouldn't increase their salaries.

"This is something many people refuse to understand. In some countries, they pay a fixed salary for a certain skill-set. So if a gardener earns RM2,000, this figure will remain regardless of how much experience he has," he said.

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On the other hand, Klang MP Charles Santiago was of the opinion that as long as employers remain reluctant to increase wages, Malaysia would not be able to secure highly skilled workers or take the lead in areas involving high technology.

Tapping on his economist background, Santiago told Free Malaysia Today: "Recent studies have shown that Malaysians are paid low despite an increase in productivity. Employers need to prioritise the good of the country as well."

Santiago also expressed concern over whether an increase in minimum wages for skilled workers would motivate some employers to hire foreigners instead of locals.

Last week, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi and Malaysian Trades Union Congress (MTUC) president Abdul Halim Mansor proposed raising the minimum wages for technical and vocational education training (TVET) workers and university graduates. The suggestion by Zahid was that minimum wage of TVET workers be set at RM3,500 per month, while Abdul Halim noted degree and masters graduates should not be left out of this proposal.

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