KINIGUIDE | The govt's plan to upskill workers and raise wages

KINIGUIDE | For many years, economists, government think tanks, trade unions, employers, and even the average worker have sounded the alarm that things are not well in Malaysia’s job market.

Wages have been stagnant for years and only make a modest contribution to the gross domestic product. Few workers are union members, and fewer still have their wages negotiated through a collective agreement.

Many also argue that increases in productivity over the years were not accompanied by a commensurate increase in wages.

The minimum wage policy introduced in 2013 raised the earnings of many low-skilled workers, but fresh graduates now find their wages little better than their counterparts who have no tertiary education.

Malaysia is stuck deep in the middle-income trap. And then, the Covid-19 pandemic made everything worse.

In this instalment of KiniGuide, we explore the government’s plan to tackle the wage question by taking a page from Singapore’s playbook - progressive wages.

What is the progressive wage policy?

The government tabled its white paper on the progressive wage policy in Parliament on Nov 30, on which most of this KiniGuide is based.

Broadly speaking, the policy gives financial incentives for employers to send their workers for training and upskilling programmes, and to pay the workers more for the resulting increase in skills and productivity that they bring to their jobs.

The policy envisaged in the white paper, however, will...