Who does not like to get their pay rise? Then why are some people panic over it?
Prime Minister Datuk Seri Najib Razak brought the 1.4 million civil servants the good news of pay rise on 8 March 2012, and the minimum wage policy for the private sector will also be revealed soon. The country seems to have been moving towards a high-income economy.
Some people are happy, but some are worried. Former Prime Minister Tun Dr Mahathir Mohamad is worried that if productivity is not improved but only salaries are adjusted, the country might follow the footstep of some Western countries and face bankruptcy.
I believe that he was referring to the pay rise in civil service sector. Adjustments to the benefits of civil servants will affect the overall situation.
For example, former Prime Minister Tun Abdullah Ahmad announced in May 2007 that salaries in civil service sector would be increased from 7.5% to 35%, there was also an additional 20% of increment for military and police personnel, as well as 100% increment for living allowance. The annual expenditure then increased by RM6.8 billion.
The people speculated that it was an election candy and this time, it is estimated that the pay rise between 7% to 13% would again, cause billions of additional expenditure.
Pay rise will worsen the budget deficit and administrative expenditure will further nibble the development expenditure.
The private sector faces a greater pressure, as talents might flee to the public domain. After the implementation of the minimum wage policy, the overall pay will rise. Since foreign workers and non-technical staff are receiving a minimum wage of RM1,000, it is impossible not to increase the salaries of middle level officers.
Another negative impact is, a major pay adjustment would lead to price hikes. Salaries are indeed increased, so do prices.
The current situation is almost the same as the situation in 2007, when the BN was also planning for the general election. However, the involving area is wider this time, as it includes the private sector. Would the country be able to withstand the wave of major pay rise this time?
One of the advantages of Malaysian manufactured products is cheap prices. The increase of costs will cause the fall of competitiveness and weak company performance could lead to lay off.
If the government keeps spending based on political considerations, our children and grandchildren might have to bear the debts and pay the price.
I also wonder, even if everyone gets a RM300 pay rise, would it be enough to afford the rising cost of living? For example, since the My First Home Scheme was launched, banks have never approved a 100% loan for young people earning less than RM3,000 a month. They are not eligible to buy RM400,000 houses.
Would young people be able to purchase houses just by implementing the minimum wage policy and increasing civil servants’ salaries? The root of the problem is not only about salaries, but also uncontrolled market speculation.
Self-sufficient in food could reduce the people’s food expenditure.
According to the World Bank’s growth report in 2008, Strategies for Sustained Growth and Inclusive Development, the key to get rid of the middle-income trap includes to successfully transform economic structure into technology-intensive industry, be active in independent innovation, ensuring a rapid growth for the services industry, accumulating wealth and having a sound system.
Malaysia lacks transformation conditions and would the pay rise bring a negative impact? Would it cost the country a heavy price?
Righteous: Any business or manufacturer that complains about the RM900 minimum wage for any reason should be ashamed of themselves.
After all these years, you have exploited these poor people, now they are given this and you complain.
Clever Voter: Cheap labour costs are no longer sustainable. These capitalists are greedy, and want to squeeze their staff. But no longer should this carry on.
They should close shop if they think they can hire people for a pittance. Let’s be responsible – look after your people and they return the favour.
Voteforchange: Sorry, I don’t buy the idea of minimum wage. In the end, we all will suffer when the higher labour cost is translated into higher consumer prices for all of us.
Only the underpaid workers will gain from this policy. So, if you want to earn more, you got to study and work harder. Simple as that. There is no short cut to an easy life.
Gusnargh: The problem here is not the workers and I hesitate to blame the employers too.
The fact is many small businesses in Malaysia are being pushed out of business because many larger, crony-linked businesses are able to access cheap government loans and use economies of scale to push down their costs and out-compete the small businesses.
I support the idea of a minimum wage as long as it gives everyone a chance to get a working wage. But, please, the government must also give some thought to controlling the employment of foreign workers.
Right now, small businesses are hiring foreign workers because they don’t have to pay EPF (Employees Provident Fund), Socso (Social Security Organisation) or contribute to the HRDF (Human Resources Development Fund).
Make the cost of hiring a foreign worker the same as hiring a local worker.
Anonymous: Hiring foreign workers is not cheap. Employers have to absorb levy, medical, housing, etc.
The attitude of young locals have changed. They want an easy job with high salary. So at the end of the day, there are other reasons behind our dependancy of foreign workers other than salary alone.
Anonymous_3f6d: The companies have been exploiting the workers all the while, so please reduce your profit margins to absorb this minimum salary scheme. Be fair to your fellow human beings; they are not your slave workers.
Nambekei 7: These people can pay their maids RM900 but they cannot pay their workers a minimum wage.
They should go open a coffee shop if they can’t make profits. They should be looking at automation, improving productivity, sending workers for training, etc, and consider giving something back to workers rather than go on their holidays.
Anonymous: Such companies should bite the bullet. If you are no longer competitive, close shop. You have no right to exploit the poor workers.
Please move into areas where you can be competitive and survive. We have a situation where jobs have been taken by millions of foreign workers instead of locals.
Anonymous: Minimum wage definitely have to be revised as the current rate is too low.
However, to call employers greedy is very shallow of the commentators. Do you know what it takes to become an entrepreneur? Do you know how much one suffers or the hardship one has to go through during the initial years when starting a business? Do you know the risk involved?
After the many years of hardship, stress and risk, you think it is unfair for your boss to take a holiday or buy an expensive car?
Those of you who support increased wages, are you willing to pay more for the end product? Why will increases in wages hurt industries? Because most consumers still expect cheap goods.
Wages have to be reasonable. At the same time, productivity has to increase. Both employers and employees should work together to make things better.
MY Kee: Of course, all the workers would love to have minimum wage. Can the industry handle it? Small shop or factory owners will probably reduce head count to cut the cost (unemployment rate increase).
The export industry will lose its competitiveness, more foreign investors will go to places like Vietnam and India to produce their products. It’s not to say that minimum wage is bad. It is good, but the implementation must be gradual.
Gggg: A firm starts small with the boss driving a Proton and its staff taking the bus. After 10 years, the boss is driving a big car yet the staff are still taking the bus, and some lucky ones manage to buy a Kancil.
The staff still struggle to buy a house but the boss has bought many houses and even a farm in China.
With the minimum-wage policy, the boss may have to live with just one or two houses, but at least the staff can drive a Proton and probably afford a house.
The income disparity between employers and employees is too wide here in Malaysia compared with that in the developed countries.
1MDB’s RM8.5 bil purchase a pay-off to Mahathir-linked billionaire?
The decision by government-owned 1Malaysia Development Berhad to take over Tanjong Energy Holdings from billionaire tycoon Ananda Krishnan (pic) for RM8.5 billion has raised the suspicion of DAP’s economics savvy member of parliament, Tony Pua.
“The question that needs to be asked is whether this is a pay-off for Ananda Krishnan, who according to former prime minister Dr Mahathir Mohamad, made his billions as a direct result of his administration’s policies.
“What is of greater concern however, is the manner which 1MDB is financing its business and operations, which is funded entirely by debt guaranteed by the Federal Government,” said the Petaling Jaya Utara MP in a statement made available to Harakahdaily.
While not denying that Tanjong Energy was profitable, Pua questioned 1MDB’s justification to invest such huge sum of money in a field that is alien for it.
The investment, added Pua, also ran foul of the company’s objective to be a “strategic enabler for new ideas” and “new source of growth” as the local independent power producers (IPPs) market had saturated by more than 20 IPPs.
1MDB has no expertise or experience in oil and gas, property development and now, the power generation sector, stressed Pua.
Recalling how 1MDB had taken a RM5 billion debt in its RM4.2 billion investment in PetroSaudi Joint Venture with PetroSaudi International company, Pua said 1MDB had been short of cash to finance the other two mega projects it obtained through direct negotiations – the 160ha Bandar Malaysia in Sungai Besi, Kuala Lumpur, and the RM26 billion Kuala Lumpur International Financial District.
Against such a backdrop, Pua said 1MDB’s latest investment made the company the most leveraged company in Malaysia with risks covered by Malaysian tax-payers.
“1MDB is setting itself up to become Malaysia’s mother of all bail-outs,” he warned.
“If it happens, it will be a disaster of epic proportions to our financial sector which will trigger possibly the worst economic crisis the country has ever faced,” said Pua, adding that prime minister-cum-Finance minister Najib Razak must come clean on the matter in parliament to prevent the country from falling into financial disaster.
Rustom Readymoney switched off the engine of his Tata Indica, swung out his pale hairy legs and locked the door, going round the car thrice to check that all the doors were indeed secure. At preci-sely the same moment, Peston Parsimoney roared in on his Royal Enfield and joined his old schoolfriend and fellow card-player at the Dadar Parsi Gymkhana. Thumping him on his back, he said, “Eh sala Rustom, why are these B…C…parjaats making such a royal ruckus over our Punchayet trustees telling the Bombay high court that their definition of a poor Parsi is a person who earns less than Rs 50,000 a month?”
Rustom’s prominent Adam’s apple did a vigorous bungee jump of agreement. “Yes, these non-Parsis simply don’t know the minimum requirements of our glorious race.”
The two men straightened their impeccable Bombay Dyeing shirts and walked into the club verandah, past the dozing octogenarians in the easy chairs, past the flirtatious ‘mailas’, the young women whose ivory legs were kept perfectly waxed by Behroze Billimoria, or any of the many Dadar Parsi Colony beauticians.
Messrs Readymoney and Parsimoney ordered a mint tea, a plate of crisps made by the Parsi-owned Camy Wafers, and kolmi na kawab. When they arrived, Rustom looked down his long nose at the club’s signature spicy shrimp balls. And said, “This m….c…new caterer is really short-changing us. These are scrimp balls,” he added slapping his thighs and guffawing loudly at his own joke.
They then turned serious over a subject hotter than Perin Aunty’s pomfret curry. Messrs Readymoney and Parsimoney simply couldn’t understand why the media was going on and on about the Bombay Parsi Punchayet’s idea of the poverty line. Said Readymoney, “We stand out because we have set such a high standard for ourselves. Should we start living like the altu-faltu? Have we made bheja na cutlace (cutlets) of our brains?”
Just as they switched from tea to beer, Readymoney and Parsimoney were joined by Tehmton Treasurywalla, who arrived looking like a depleted coffer. He endorsed the BPP’s BPL benchmark, and agreed that the rest of the country was talking through its topi if it thought that anything less than 50K could keep body and soul together. “We are used to the Wadia wads in our baap-dada’s steel Godrej, and you can’t expect us to say Tata to all that,” he grumbled, shamelessly plagiarising the joke that had been doing the rounds ever since this gobsmacker definition of poverty hit the newsrooms.
Parsimoney belched out his protest and a bit of prawn: “Do you know what it costs to keep my daughter, the doll jevi Daulat in Shiamak Davar’s dancing classes? Do you expect the apple of his mother’s eye, apro Gym Jimmy, to forgo his bodybuilding classes? Are we to go on a starvation diet of only a two-egg omlette for breakfast, no fish for lunch and no gos in our masoor for dinner?” He snapped his fingers thrice to ward off such a dire destiny.
Readymoney chipped in, stuffing a fistful of wafers into his mouth, “Do you know how much that nalayak Soli Solicitor costs me for all my property litigation? Charges me, even though he is my sister-in-law’s second cousin’s son? Why, even that sala Homi Homeopath has raised his fees, may he choke on his own Nux Vomica.”
The thought of such a Below Parsi Line penury was enough to turn the trio off its third beer. It was a prospect more depressing than the community dying out. Or even worse, their daughter running off with a non-Parsi.
Alec Smart said: “Long wait yet for Rah-Rah-Rahul.”