COMMENT | Will progressive wage model to boost pay, productivity work?

COMMENT | The Progressive Wage Model (PWM) could be on the verge of being adopted in Malaysia. This voluntary, incentive-based, and productivity-linked policy aims to address pressing issues such as low wages, income disparity, and low productivity.

The PWM, which was said to have improved income gaps, job quality, and productivity in sectors like cleaning, security, and landscaping in Singapore, is slated to be presented by Economy Minister Rafizi Ramli via a tabling of a white paper tomorrow.

Malaysia's wage landscape, influenced by factors like recent currency devaluation, escalating youth unemployment, and heavy reliance on foreign labour, primarily relies on the Minimum Wage Model.

Despite the recent increase to RM1,500 per month with annual rises of 5.24 percent for Peninsular Malaysia and 6.49 percent for Sabah and Sarawak since 2013 recorded, overall labour productivity only managed a 2.3 percent annual increase from 2013 to 2022.

This disparity between consistent minimum wage growth and slower productivity escalation poses indirect risks of potential job losses or underemployment in the long run.

Could the PWM provide a solution or...