Activist moots wage cap for private sector’s top-level execs

While calling the salary hike for civil servants a welcomed and long overdue move, labour activist Callistus Antony D'Angelus said laws governing private sector employment need to be reformed in order for it to respond in kind.

In a statement today, he pointed out that the wage gap in the private sector has reached “obscene levels” and suggested reforms to cap the remuneration enjoyed by top-level executives.

"If a study were to be carried out objectively, it would clearly show the gap between the highest and lowest earners in most companies has grown exponentially.

"The gap in total compensation is now at a level where it can be described as being obscene.

"Corrupt practices and a lack of oversight by previous governments is the main reason for this predicament," said D’Angelus, who is the international labour adviser for the Social Protection Contributors Advisory Association Malaysia (Spcaam).

Yesterday, Prime Minister Anwar Ibrahim announced a 15 percent salary adjustment for civil servants in the implementing, management and professional groups and seven percent for those in top management.

The adjustment will be implemented in phases, starting from Dec 1, 2024, for Phase 1; and from Jan 1, 2026, for Phase 2.

Touching on the plight of private sector workers, D’Angelus claimed the disenfranchisement felt by the poor and less privileged is largely due to the abuse by employers, particularly big businesses, of the resources of the country.

He said that while Anwar has called on the private sector to pay its workers reasonable wages, it is unlikely to bear fruit without legislative reforms.

"This is a big challenge if we were to rely on the private sector to do so on their own accord, where they are used to operating in a system maximising profit through the exploitation of workers and the resources of the country.

"Any semblance of equality and equity can only be achieved through legislative reforms, where wage equity and fair treatment of employees based on human rights principles are entrenched in legislation," he added.

Citing the Malaysian Employers Federation (MEF) as an example, D’Angelus said the organisation had always been resistant towards any reforms involving upward revision of wage levels for workers.

"They seem to conveniently ignore the rise in wage levels of senior executives.

"If they are genuinely and truly concerned about wage costs, perhaps they should advocate the need for a wage cap (for top executives).

“That would certainly keep costs down," he said.

Market forces, policy decisions

On allowing market forces to determine wages, D’Angelus called it a dishonest and corrupt argument.

"The market does not operate independently of policy decisions. Markets move based on the aggregation of decisions made.

“If one company raises the wages of its CEO, the average moves upwards. Others then follow suit, driving wages upwards.

“That is the reason why we see obscene income levels of senior executives in some companies and the same approach and philosophy are used to depress wage levels of low-income workers," he said.

And with the influx of migrant workers, D’Angelus said wages for average workers are fixed at levels that Malaysians cannot afford to live on, thereby driving wage levels of the lower income group further downwards.

Offering solutions, the labour activist said the prime minister should change some members of his cabinet.

"The prime minister cannot do this on his own. The business community, despite seemingly lining up behind him, is actually working against his reform agenda.

"The Human Resources Ministry is of no help and is in cahoots with big business," D’Angelus claimed.

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