KRI calls for govt review of wages as levels too low

Khazanah Nasional managing director Datuk Shahril Ridza Ridzuan launching the SWTS report. Looking on is lead author and KRI senior visiting fellow Dr Lim Lin Lean (right) and KRI executive committee chairman Datuk Hisham Hamdan (left).

PETALING JAYA: Malaysia’s low-wage environment has forced young job seekers to be willing to work for as low as RM1,715 on average, or about 40% lower than 2017’s national mean monthly wage.

Khazanah Research Institute (KRI) made a startling revelation that many young people, particularly those in part-time jobs, are even willing to work below their reservation wage just to land a job. The reservation wage is the wage below which youths would refuse a job offer.

This calls for an urgent review of wage levels by the government, urged the think-tank.

In its “School-to-Work Transition of Young Malaysians” report, KRI said that the review could also consider “the likely desirability of establishing a living, fair and decent wage, and not just a minimum wage.  

Earlier this year, Bank Negara estimated that a Kuala Lumpur-based single adult’s living wage in 2016 should have been about RM2,700. However, nearly 50% of the working adults in Kuala Lumpur earned less than RM2,500 per month in 2016.

The Malaysian Employers Federation executive director Datuk Shamsuddin Bardan who spoke to The Star then, described the living wage concept as “unrealistic” in Malaysia for the time being.

The “School-to-Work Transition of Young Malaysians” survey report, which was launched yesterday,was conducted from the end-2017 to the start of this year in order to collect education and labour market information on youths aged between 15 and 29.

Nearly 24,000 students, job seekers, workers and employers participated in the survey.

KRI debunked a common myth among employers in Malaysia that young job seekers demand high and unrealistic salaries.

“Employers complain that fresh graduates are “asking for too much”, [with salary expectation] of between RM2,400 to RM3,000. The report’s data show actual monthly income (mean value) of RM1,846 for young workers and reservation wage of RM1,715 for young job seekers,” it said.

According to the report’s lead author and KRI senior visiting fellow Lim Lin Lean, high income only ranks fourth among the youths’ seven top job characteristics.
The first on the list was work-life balance.

“It is not true that youth unemployment occurs because of their high salary expectation. This is exactly the opposite of our findings and this is exactly what our report is trying to debunk,” she told reporters at a press conference .

Lim also pointed out that the surveyed youths consider foreign workers as competitors for job opportunities. She called upon the government to review the Malaysia’s cheap labour policy, which affects the country’s productivity and growth. 

“The different youth groups feel that both low-skilled migrants and high-skilled expatriate workers threaten their job opportunities. They clearly want expatriate jobs.

“When they do not want the migrant jobs, it is because these are “3D” jobs - dirty, difficult and dangerous - that offer too low pay, particularly when they can get higher wages from doing such jobs in Singapore,” she added.