PUTRAJAYA: Employee compensation as a share of gross domestic product (GDP) is targeted to rise to 40% by 2030 from 33.9% last year, as the government seeks to ensure economic growth translates into better wages for workers.
Economy Minister Akmal Nasrullah Mohd Nasir (pic) said the share increased from 33.6% in 2024 to 33.9% in 2025, against the target set under the 13th Malaysia Plan (13MP).
“The figure needs to be read alongside developments in wages, productivity, skills and the cost of living so that growth truly delivers fairer returns to workers,” he said in his speech read by Deputy Economy Minister Datuk Seri Mohd Shahar Abdullah at the opening ceremony of National Statistics Day 2026 here yesterday.
Akmal Nasrullah said high-value investments would not necessarily generate higher incomes if local workers and suppliers could not participate in the value chain.
“Investment statistics need to be read alongside data on employment, wages, skills, productivity and the capabilities of enterprises,” he said, adding that the government must look beyond national growth figures to determine who benefits from economic progress.
Under Budget 2027, the government announced that the minimum wage would be increased from RM1,700 to RM2,000 a month from June 2027, with an exemption for micro, small and medium enterprises (MSMEs) recording annual sales below RM50mil to allow time for adjustment.
However, Akmal Nasrullah said raising the minimum wage alone would not ensure sustained wage growth throughout workers’ careers. He highlighted the risk of wage compression, when the pay gap between new entrants and more skilled or experienced employees narrows.
“The aim is not merely better starting wages, but reasonable wage progression throughout a career,” he said.
The Progressive Wage Policy, which links salary increases to skills and productivity, would complement minimum wage protection by providing clearer opportunities for career progression.
Akmal Nasrullah also highlighted the Basic Expenditure of Decent Living Index, which estimates the expenditure required for households to achieve a decent standard of living based on location, household size and composition.
“It is not a minimum wage rate and cannot be applied as a uniform wage for all workers. Instead, the index helps us assess income adequacy and differences in living cost pressures between households and locations,” he said.
He said combining wage and productivity data with the index would help the government identify income gaps and formulate more targeted interventions.
The Malaysia Wage and Salary Survey Report 2025, published in September, is also an important reference for assessing wage trends and disparities across skills, occupations and sectors.
Akmal Nasrullah said labour market reforms under the 13th Malaysia Plan aimed to increase the value of work, improve the matching of skills with jobs and ensure productivity gains translated into higher incomes.
