Progressive Wage Policy: A critical step in increasing workers' wages

PETALING JAYA: The implementation of the Progressive Wage Policy is critical to provide incentives, so as to allow companies to commence the raise of workers’ wages voluntarily, said Economy Ministry deputy secretary-general (Policy) Datuk Dr Zunika Mohamed.

She said major policy planning such as the 13th Malaysia Plan (RMK-13) and long-term economic reforms required a surge in the labour market.

Unstable wages, she added have created the effect of wage compression (the wage gap between old and new workers is narrowing), especially for those who have just entered the working industry.

“Salary is a key pillar because the foundation of the country’s economy lies in the quality of our talent. Talent is one of the structurally difficult points in our economy, especially for Small and Medium Enterprises (SMEs), said Zunika when delivering her keynote address at the National Economic Forum (NEF) organised by the National Chamber of Commerce and Industry of Malaysia (NCCIM) 2024 here today.

She added thaat the Academy in Industry and Reverse Linkages’ is important to increase the workforce and to ensure there is enough suitability to meet all demands of SMEs.

Zunika said the ministry also acted to consolidate public sector resources through policies such as the Primary Database (PADU) and rationalisation of subsidies besides starting a data collection process that will facilitate policy makers to minimise inclusion and exclusion errors in subsidy retargeting efforts.

At the same time, she remarked that the people also need to understand the new growth areas that are available to chart the upcoming economic path.

“The careful planning in KL20 and the National Energy Transition Roadmap (NETR) can bridge the gap. KL20 provides start-ups with access to new capital, guidance from international venture capital firms and a young, digitally savvy workforce.

“This has produced numerous effects across not only Malaysia, but the entire region, and will accelerate the country’s efforts to become more skilled with high economic growth,“ she said.