Don't use minimum wage as benchmark for starting pay of fresh graduates- Rafizi

PUTRAJAYA - The minimum wage of RM1,500 should not be set as a reference or benchmark by employers to pay the salary of fresh graduates, said Economy Ministry Rafizi Ramli.

"The concept of minimum is that if the minimum wage exists, then the starting wage for a degree (holder) should be higher because minimum wage is for unskilled workers, not skilled workers.

"However, preliminary findings of wage statistics show that the minimum wage is used as the reference wage to pay (salaries), especially to fresh graduates and young skilled workers.

"This is a phenomenon that requires an urgent policy for us to rectify the situation," he told the media after the launch of the Employee Wages Statistics (Formal Sector) Report for the first quarter of 2023 here today.

The report showed that 10.2 per cent of the 6.45 million formal workers were paid a salary below RM1,500 in March 2023.

Commenting on the report, Rafizi said the majority of Malaysians were paid low wages, whereby 82 per cent of the 6.45 million formal workers were paid less than RM5,000 a month and 35 per cent of that number were paid RM2,000 and below in March 2023.

"With the publication of this report, we know that we have salary issues. It is not just talk, now it can be confirmed by data that over six million workers (are affected) and the government will focus on this matter,” he said.

He said the report also revealed that the median wages for formal workers in March 2023 stood at RM2,600, which is not far from the poverty line income (PGK) of RM2,589.

"We do have a big problem. This is what restructuring is all about, it’s not just about getting investment, and growth (but) it is making sure that whatever growth and investment that we plan or generate should be reflected in the daily livelihood of our workforce,” he said.

Rafizi said the progressive wage model, which will be presented to the National Economic Action Council (NEAC) on Monday, will be an important background for the government to deal with wage-related issues.

"I know it is also a big challenge for employers, we have to find a way for us to resolve these issues,” said Rafizi, who is also confident that the progressive wage model to be tabled can be implemented practically and get the support of employers.

"We have held engagement sessions with the employer group, so we have spoken and got their views. So far, small and medium-sized companies with fewer than 50 people have been informed basically,” he said.

Also present were Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin and the ministry’s secretary general, Datuk Nor Azmie Diron. - BERNAMA