8.8% of Malaysian workers paid below minimum wage

8.8% of workers in the country are paid a basic salary below the RM1,200 (US$291) monthly minimum wage.
By: | April 21, 2021

Datuk Seri M Saravanan, Malaysia’s Minister of Human Resources, added that 62.5% of workers, including graduates – hired in the third and fourth quarters last year – received basic wages ranging from RM1,200 (US$291) to RM1,499 (US$363) monthly, according to data from the Employment Insurance System (EIS). 

Saravanan cited these statistics in response to a recent report by The Malaysian Insight quoting Malaysia’s chief statistician Datuk Seri Dr Mohd Uzir Mahidin as saying that fresh graduates who entered the labour market received lower starting salaries in 2020 year-on-year – with some even earning below the minimum wage. 

Uzir was quoted as saying that entry-level degree holders saw a drop in monthly salary, with the bulk of them earning between RM1,001 (US$242) and RM1,500 (US$363) in 2020 compared with RM2,001 (US$485) and RM2,500 (US$606) in 2019. He also said the monthly salaries of diploma holders were between RM1,001 (US$242) and RM1,500 (US$363) in 2020. 

Saravanan said three factors contributed to the concentration of wages at the RM1,200 (US$291) to RM1,499 (US$363) per month range – stronger demand for non-graduate jobs, location and cyclical unemployment due to the pandemic, reported The Edge Markets. 

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The minister also said different sectors and growth in the labour market responded to the pandemic in different ways – salaries for different occupations have either increased, declined or remained stagnant. “Data from the EIS, Social Security Organisation (Socso), shows that the monthly average of wages in the economy in 2020 has risen 4.4% from the average of RM2,519 (US$610) to RM2,631 (US$642).”