MAY 7 — This Labour Day, as the nation observed its national holiday, 10,000 people took to the streets of KL to march in a peaceful rally. While the Mayday rally has been organised annually since the 1990s, this year the newly implemented Goods and Services Tax (GST) has been taken up as a forefront issue.
On first look, it appears that GST, a consumption tax, has no direct link to the marking of Labour Day. Some were fast to decry it as a populist appeal to garner political support.
The word ‘labour’ often invokes the stereotypical imagery of a blue-collar worker who toils away under the sun for a living. The state and the society employ highly discriminating tones when deal with both high-skilled labour and low-skilled labour. The former is ‘talent’ to be attracted and retained at all cost, while the latter is ‘worker’, the tricky policy issue to be contained if not resolved.
Yet, labour force is in actual fact made up of many segments of expertise. As Malaysia slowly but surely moves up the value chain with increasing educational opportunity, the younger generation has increasingly joined the ‘knowledge-based economy’. In fact, corporations have repeatedly lamented the difficulty to find employees with the right skill sets.
The crux of business is perhaps summed up best by an unlikely guru, Karl Marx, in his equation M-C-M’, which underlines that the capital accumulation process is through changing money (M) into commodities (C) in order to create more money, i.e. profit (M’). He views labour as a commodity, where a labourer is the bearer of that commodity and sells it to the capitalist. Surplus value is created by systemic and continuous use of labour, which capital needs to expand, under the supposedly free and fair transaction in a proper functioning market system.
In 21st century industry lingo, however, the line between the two commodities, capital and labour, are blurred, where high-skilled labour are often referred to as ‘human capital’. Yet, whether you labour with your hand or with your brain, the truth is that the human factor is still the core to sustaining the economy.
Beyond, the harder truth is also the fact that our economy thrives on a hierarchy. A CEO’s worth is sustained by those at the lower end of the economic food chain. To add to the illustration, it was reported that in Malaysia, an average CEO earns a salary 90 times greater than an average worker. Piore (1979), a proponent the Dual Labor Market theory, even gone a step further to suggest that it is the fear of ‘structural inflation’ which prevents raising wages at the bottom, as the hierarchy will be upset and wages at the top have to be increased correspondingly to maintain the socially-defined job hierarchy.
At the global level, nation-states do the same, in which cities evolve into positions and define their specific function in the global value chain of production and exchange of commodities, in what scholars called the ‘new international division of labour’.
For instance, the Asian inter-firm networks in the last decade often involved the Japanese firms as providers of technological knowledge, Taiwanese and Korean companies as the management and suppliers of the goods, and local Southeast Asian firms as the labour provider. Similarly, they also ‘step on’ the other to move up the value chain by shipping low skill jobs to other developing countries trailing behind. In the case of Malaysia, while we strive to move towards value-added economy, we have also sustained much of our competitiveness with the presence of low-skilled foreign workers, who earn much lower wages than what the locals would accept.
Not only labour has generated the surplus value for capital, the labourers are also consumers. This is perhaps why many felt the pinch of GST, which taxes on consumption, because, well, to live is to consume.
Even on our rest day, we are contributing to the economy by consuming. Whether it is a hearty meal with friends, or shopping sales for household and personal items, these leisure activities that we undertake with our hard-earned wages, to make our lives and that of our families better, so that we can go back to work again when vacation ends hopefully a bit more re-charged and motivated, are taking away parts of our income to give back to this big money-churning machine called capitalism.
Already, our wages has stagnated. Increase in wage, at about 2.6 per cent annually, has not caught up with labour productivity which increase at 6.7 per cent, a serious divergence since 1996, as the First Malaysian National Human Development Report (2013) noted. The share of wages in national income, that is, the portion that the labour force as a whole take home as contrary to capital, is only 32.9 per cent in Malaysia, less than the Singaporeans which has 42.3 per cent and just about half of United Kingdom at 62.6 per cent. The plea by trade unions and civil society to increase minimum wage to RM1,500 has also gone unheeded. To add to the damage, the Federation of Malaysian Consumers Association (FOMCA) estimated that prices has gone up 30 per cent since GST was implemented.
The perception of labour being the low-skilled workers in the ‘labour-intensive’ industry, a term which might warrant some re-thinking, had etched in us so deeply that most of us who identified ourselves as the middle class has seemingly forgotten that we are parts and parcel of the labour force. We have been desensitised to such extent that we no longer identified ourselves as a collective working class, in which a degree-holding engineer and a minimum wage earning factory assembler belong alike. What more, we are part of the class which similarly earn our means to consume by selling our labour power.
In that respect, it is indeed fit that GST has been chosen as the theme of this year’s May Day rally. Yet, the buck does not stop at GST. Beyond that, Malaysians are facing a double squeeze, with stagnating wages and rising cost of living. This May, the labour force ought to be celebrated by acknowledging its pivotal role as the movers of the economy, and by given what it is due.
* This is the personal opinion of the writer or organisation and does not necessarily represent the views of Malay Mail Online.
