DAP disagrees with the World Bank that the poor quality of Malaysia’s education system is more worrying than the level of debt in its households. Dr Frederico Gil Sander, who is World Bank senior economist for Malaysia, explained that the country’s substandard education system would affect the pool of skilled talent it needs to grow its economy to become a high-income nation, while high household debt is not necessarily a problem if the economy continues to grow and citizens are gainfully employed. Malaysia records the second highest household debt in Asia from 81.1% of Gross Domestic Product (GDP) in 2012 to 86.8% of GDP in 2013.
DAP believes that both are equally as big a national economic threat to Malaysia and likely to derail Vision 2020 of transforming Malaysia into a developed economy. High household debt diminishes the quality of life with social records invariably showing that children’s education would be amongst the first to suffer when economic distress strikes. Further our income is not growing quickly enough to provide a discernible improvement in the quality of life and our citizens are not gainfully employed with rising-income jobs.
Labour unions claim that generally during the last decade, productivity rose by 6.7% annually but real wages inched up by just 2.6% each year. The situation in the manufacturing industry is more distressing with real wages of export-oriented industries increasing by 1.9% whilst that of domestic-oriented industries rose by 1.4% after 1997.
The price hikes by the BN Federal government last year in sugar, petrol, power tariffs and motor insurance premiums have highlighted the sad fact that wages can not keep up with inflation. DAP proposes a minimum monthly wage of RM 1,100 combined with a grace period for Small and Medium Entreprises(SMEs) for 5 years that would serve to increase income for Malaysians and help economic growth by protecting Malaysian SMEs.
PR’s minimum wage policy is RM 1,100 monthly is acceptable to SMEs provided that it does not cover foreign workers. After the 5 years grace period, SMEs have to pay the minimum monthly wage to all foreign and local workers. Further Malaysia loses out when foreign workers send most of their money home. Remittances by legal foreign workers doubled from RM 10 billion in 2009 to almost RM20 billion last year. This RM20 billion foreign workers’ remittances last year are expected to double when the minimum wage is fully applied to foreign workers.
For this reason, Malaysian employers and employees should be looked after first by ensuring that employees enjoy a higher minimum monthly wage of RM 1,100 and giving SMEs, a grace period of at least 5 years for SMEs to adjust before extending this minimum wage to foreign workers.