Pakatan Rakyat today released copies of a confidential World Bank report to support its argument that a minimum wage policy won’t destroy the national economy.

azlan “The document shows that the impact of a minimum wage, whether it is as RM900 or RM1,100 on most sectors is minimal, except in low end manufacturing, which the government should assist through other means such as facilitation to move from labour intensive to technology and skills intensive operations,” argued DAP’s Bukit Bendera MP Liew Chin Tong.

The report, said Liew at a press conference in the Parliament lobby today, also showed that:

  • Minimum wage will have very little impact on foreign investments as it is a fraction of total investment. Location, infrastructure and regulatory environment being more important;
  • Simulated impacts on economy and various sectors of an RM1,100 minimum wage shows almost nil negative effects;
  • Minimum wage policy will reduce use of unskilled foreign labour for semi-skilled local workers as salary gap narrows.

Liew said he decided to release the report after being informed by Kota Belud MP Abdul Rahman Dahlan that the report was not classified as a state secret, and after their calls for the report to be furnished by the government went unheeded.

The report titled ‘Optimal Design for a Minimum Wage Policy in Malaysia’ was released by the Human Development Department of the Social Protection and Labour Unit of the East Asia and Pacific Region branch of the World Bank.

Commissioned by the Malaysian government, it was marked ‘confidential’ and ‘internal version to client, not for circulation’.

'Now is not the time for a polemic'

Meanwhile, PKR veep Chua Tian Chiang, who was also at the press conference, added that now is not the time for a polemic on whose minimum wage policy will destroy the economy.

“We need to discuss concretely to to help the companies affected,” argued the Batu MP.

He said that BN seems to lack earnestness in its declared minimum wage policy as there seem to be no measures and contingencies in place for the SMIs.

NONE Fellow PKR representative Abdullah Sani ( left ) questioned if the government is really going to implement the minimum wage as it kept postponing the date of the policy coming into force, despite the grand announcement by PM Mohd Najib Abdul Razak.

“They had made provision for six months, and then another six months. When are they going to implement it?” asked the Kuala Langat MP.

The minimum wage policy has become another bone of contention between the BN and the opposition Pakatan as both have announced separate minimum wage policies.

The BN is accusing that Pakatan’s proposed RM1,100 minimum wage was a move that will destroy the economy while Pakatan argued that this is not so, blaming the BN for not taking care of helping to improve the business infrastructure for SMIs in lower end manufacturing.

The full report is available at Liew’s website.

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