MTUC moots RM500 monthly allowance for all, upping retirement age to 65 for Budget 2020

Solomon said workers are in a ‘make or break’ situation currently. — Bernama pic
Solomon said workers are in a ‘make or break’ situation currently. — Bernama pic

KUALA LUMPUR, Sept 1 — A minimum monthly cost of living allowance (COLA) should be introduced and the mandatory retirement age increased to 65 in the upcoming Budget 2020, said the Malaysian Trades Union Congress (MTUC)

Its secretary-general J. Solomon said the RM500 COLA and increased retirement age limit were indicative of a dire need for people-centred programmes that provide for the protection and uplifting of economic conditions of the population’s bottom half.

“The need for the COLA is justifiable based on the ever-rising cost of living and the recent finding by the United Nations whereby Malaysia has been using an outdated and incorrect factor in determining the national poverty line,” he said in a statement.

Adding that the national poverty line has been one of the factors in setting the minimum wage, Solomon said the higher retirement age proposal is due to the lack of sufficient income to sustain retirement, even as the Malaysian lifespan is expected to increase in the future to 80 years on average.

“The government must accept that Malaysians in the middle and lower-income levels are unable to make ends meet, and those with families are actually struggling.

“We are not asking for higher take-home wages, we are only asking for real wage. The UN findings show that the poverty rate is as high as 15 to 20 per cent, and this has direct relevance to low wages,” he said.

The secretary-general also urged the government to consider Bank Negara’s report, which indicated a working bachelor in Kuala Lumpur needs a minimum of RM2,700 a month to enjoy a decent living, whereas a married couple with two children has to earn about RM6,500.

“The current salaries for many Malaysians are far below these amounts. It is now timely for the Government to consider the real living wage. It is also their key responsibility to lower the cost of living to enable sustainability, but historically whatever commodity that went up in prices never came down.

“The private sector has no valid reason to delay as they have enriched themselves from this for many years, and consequently caused wide income inequality in Malaysia. It is their moral obligation to compensate the workers who have been short-changed and made to suffer for many years,” Solomon said.

“Therefore the introduction of COLA would be an effective move to address the current income disparity and the pittance minimum wage, as it will strengthen the aggregate demand and boost economic growth in the process.

“With the current low wages and the high cost of living, workers are in a ‘make or break’ situation. The RM500 would be a major boost for the B40 and M40 category of workers who are the hardest hit,” he said.

On the higher retirement age, Solomon said this will boost the Employees Provident Fund (EPF) savings for those in the lower-income category as well as senior citizens, who could then depend less on their children, society and the government for old-age support.

“We propose the extension of retirement age be optional and at the same time the EPF withdrawal should also be optional at the age of 55.

“For those who withdraw at 55, they will still have continuous savings up to 65 years of age with the extension of the mandatory retirement age,” he said.

The two proposals are among six submitted by MTUC to the government on Monday (Aug 26) for consideration in Budget 2020, which will be unveiled next month.

Other proposals include the introduction of human and workers’ rights into the current syllabus for secondary and tertiary education, enhancing accessibility to vocational programmes and increasing collaboration between industries and vocational providers, providing security of tenure in employment for workers in facing the Industrial Revolution 4.0, and enhancing employee welfare and employment opportunities.

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