February 10, 2010

Minimum Wage Rate in Sabah and Malaysia as a whole.

Well, I cannot speak for Malaysia but I'll speak for Sabah. It's ridiculous! My cousin whom graduated with a degree more than a year ago came back to Sabah to work. She found work in one of the local companies, she's an entry level. Nonetheless, I still find that her starting pay is preposterous. RM900/-? What? She is a graduate! The entry level wage of someone entering the banking industry in Singapore (graduates) 2 years ago was SGD1,200/-.

My gosh! I left Sabah in 1994 and my last paid salary of RM550/-, when I came back 13 years later, I see people(non graduates) still getting paid RM400/- to RM600/- and they were experienced in the field that they do. I am not a graduate but when I went to Singapore to work in 1994, my starting pay was SGD800/-. When I left 13 years later, my pay was SGD2,800/- per month. This is not inclusive of fixed bonus(where the bank will pay me regardless whether they are making profit or not), variable bonus (in recession, between 2 months to 3.5 months of monthly pay) and perks and benefits. My perks and benefits were SGD1,000/- per annum. Taking the extreme situation where the economy is not doing well, my annual income would be close to SGD40,000/-. I also have incentives including cash and non cash when I meet my Key Performance Index. Not bad for a guy with only SPM qualification.

The towkays (Chinese and Non Chinese) have fought vigorously against Minimum Wage Rate and the authority has relented to their stands. The authority mitigated that implementing Minimum Ware Rate will discourage foreign investment in the country. Fair enough. However, with the advent of Government Service Tax, a hah! The authority has more money now. The authority should use this newly acquired tax mechanism to benefit the citizen.

The authority can channel all these funds acquired from this new mechanism to attract investment to the country e.g tax exemption for a limited time period etc. Implement Minimum Wage Rate now. Come on, even a drop out economist can tell you that money makes money. You put more money to your workers, he will spend more.

The chinese of olden times understood this concept. Read all the stories about chinese towkays cum philanthropists. They poured money back to the society and reasoned that because they have reaped so much from society, they should return in kind. I think there's a practical reason to it, apply the principles of economy. If you pump money into the economy, it will generate more money. It will eventually come back to the benefactors.

So implement Minimum Wage Rate for our workers now especially those in Sabah so that they don't have to go begging in the streets of Kuala Lumpur or prostitutes themselves.

Be innovative, find a solution to the problems. The citizens elected you, trust you to protect them, honour that contract.
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