Malaysia minimum wage review and living wage debate

The Malaysian government is reviewing the current minimum wage of RM1,700 per month to determine whether to maintain the rate or implement an increase. Human Resources Minister R. Ramanan stated that the National Wages Consultative Council and the National Wages Consultative Council and Gig Council will evaluate economic indicators, including inflation, labor productivity, the unemployment rate, the poverty line, and the median wage. While the ministry has not conducted a specific living wage study, Ramanan noted that Bank Negara Malaysia estimated a living wage for a single person in Kuala Lumpur to be approximately RM2,700 in 2018. Additionally, the 13th Malaysia Plan outlines labor market reforms intended to accelerate wage adjustments.

The Malaysian Trades Union Congress (MTUC) has proposed using a living wage of RM3,100 per month as a benchmark. MTUC General Secretary Kamarul Baharin Mansor argued that this is necessary due to rising costs for food, housing, and transportation, noting that since the minimum wage policy began 13 years ago, the average annual increase for private sector workers has been only about RM61.50. The MTUC also urged the implementation of a formal salary scale structure to ensure income growth aligns with experience and to prevent long-term employees from remaining at the minimum wage. The MTUC noted that several government-linked investment companies, such as Khazanah Nasional and the Employees Provident Fund, have already implemented living wage policies for permanent staff.

In response, the Malaysian Employers Federation (MEF) has described the MTUC proposal as “unreasonable and impractical,” pointing out that a jump from RM1,700 to RM3,100 would constitute an 82 percent increase.