Employers dismiss World Bank report on stagnating wages, claim reality is different

MEF has dismissed the latest World Bank’s Malaysia Economic Monitor report, claiming it was unfair to employers for utilising starting pay as one of the indicators of the country’s labour market. — Picture by Choo Choy May
MEF has dismissed the latest World Bank’s Malaysia Economic Monitor report, claiming it was unfair to employers for utilising starting pay as one of the indicators of the country’s labour market. — Picture by Choo Choy May

KUALA LUMPUR, Dec 10 — The Malaysian Employers Federation (MEF) has dismissed the latest World Bank’s Malaysia Economic Monitor report, claiming it was unfair to employers for utilising starting pay as one of the indicators of the country’s labour market.

The group also claimed that the report does not reflect the reality in highlighting the growing wage divide and wage stagnation among youths, as the country uses a different wage system compared with developed countries.

“For example, in developed countries, a Class C journalist may be paid RM5,000,” MEF executive director Datuk Shamsuddin Bardan was quoted saying by New Straits Times.

“But in Malaysia, the pay may range from RM1,300 to RM5,000, depending on seniority, even though they are doing the same job, but that’s a structure we strictly follow.”

Shamsuddin said while it is true that the growth in starting pay in Malaysia is not substantial, employers would generally review wages after three months or once an employee was confirmed.

“There is also the annual review based on performance. But unfortunately, that’s always not reflected in such researches,” he reportedly said.

He also claimed that on average, starting pay had increased by about five per cent in the last few years.

“Those who have been in an industry for five years may see a 20 to 25 per cent increase in wages,” he was quoted saying.

The report, launched yesterday, said although median incomes continued to outpace inflation, income growth rates for low-income Malaysians slowed between 2014 and 2016.

It also said that median employment income for younger workers aged 20 to 29 grew at an annual rate of 2.4 per cent, compared with 3.9 per cent for those aged 40 to 49 in the same period as the wage divide grew.

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