Malaysian Trades Union Congress Calls for Minimum Wage Increase in Response to Service Tax Hike

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The Malaysian Trades Union Congress (MTUC) is calling for a reassessment of the minimum wage in light of a recent increase in the Sales and Service Tax (SST), as reported by the New Straits Times on March 13, 2024.


The necessity for the government to unveil an updated rate was emphasised by MTUC Secretary-General, Kamarul Baharin Mansor, noting that the last review occurred in May 2022, an almost two-year interval, setting the rate at RM1,500.


Attention was brought to the National Wages Consultative Council Act‘s requirement for a reassessment of the minimum wage every two years.


The urgency of this review was stressed, pointing to the impact of heightened SST taxes that was raised from 6% to 8% on 1 March 2024, as well as increased costs of water, electricity, and essential goods, noting that the current minimum wage rate must reflect the current rise in living expenses.


Further, referring to a 2018 report by Bank Negara Malaysia (BNM), the suggested living wages for different household types was highlighted, which suggested that in the capital, a living wage of RM2,700 is appropriate for single adults, RM4,500 for childless couples, and RM6,500 for couples with two children.


At the same time, caution was raised against maintaining a static wage rate, as it would condemn workers to poverty despite being employed, particularly affecting occupations such as cleaning, security, and manual labour, as many affected fall below the national poverty line.

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