Why did Malaysia Implement a Minimum Wages Policy?
- A study conducted in 2009 showed that 33.8% of workers in the private sector earned less than RM700 per month, relative to the country’s Poverty Line Income (PLI) level of RM800. One of the key goals of the Minimum Wages Policy is to ensure that all employees in Malaysia earn more than the PLI as the country transforms into a high-income nation.
- The implementation of the Minimum Wages Policy supports Malaysia’s ambition to become a high-income nation by setting floor wages for all employees in Malaysia. Given the significant number of employees in the country who earn less than minimum wages, the new initiative is expected to boost gross national income.
- The Minimum Wages Policy will also encourage employers to move up the value chain by increasing the productivity of their employees through the use of technology and other innovations.
- The establishment of a floor wage for all employees in Malaysia will ensure that all layers of Malaysian society enjoy the fruits of development, which in turn will spur further consumption and economic activity.
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