Govt planning to push wages-GDP ratio to 40%

KUALA LUMPUR: The Government is planning to increase the ratio of wages to Gross Domestic Product (GDP) from 33.6% last year to 40% in the long term.

Minister in the Prime Minister’s De­p­artment Datuk Seri Abdul Wahid Omar said this would be done gradually.

“This is because any wage increase must be supported by increase in productivity,” he said after attending a media appreciation ceremony with the Statistics Department yesterday

Abdul Wahid said the ratio of wages or compensation of employees (CE) to GDP in Malaysia had grown from 29.3% in 2008.

CE is the total remuneration, in cash or in kind, payable by an enterprise to an employee such as salaries and wages, gratuity, bonus, subsidies and benefits.

The department said that at 33.6% (RM331.4bil), Malaysia’s Gross Nat­ional Income (GNI) per capita was around US$10,000 (RM32,000) last year.

Abdul Wahid said Malaysia’s CE percentage last year could be higher than Thailand’s and India’s but it was still much lower than the percentage of advanced countries of around 50%.

Last year, Norway’s CE percentage to GDP was 51.3%, Sweden (53.8%) and Australia (48.7%).

Abdul Wahid said the country might not want to head in the 50% direction as it might lose its competitive edge.