Govt reviewing RM1,700 minimum wage

The Malaysian government is currently reviewing the RM1,700 monthly minimum wage, according to Human Resources Minister Datuk Seri R. Ramanan. The review considers factors such as the Poverty Line Income, median wage, Consumer Price Index, labour productivity, and unemployment rate. The ministry, however, has not conducted a specific study on a living wage.

Bank Negara introduced the concept of a living wage in 2018, estimating it to be RM2,700 for a single person in Kuala Lumpur. The Decent Living Expenditure, introduced by the Department of Statistics Malaysia, provides a more granular approach, considering factors like location, demographics, and household spending patterns. The 13th Malaysia Plan includes reforms to accelerate wage adjustments through minimum wage reviews.

The current minimum wage, effective since August 2025, is reviewed every two years. The Progressive Wage Policy, introduced to complement the minimum wage, aims to move away from a wage structure based solely on a minimum floor, towards pay reflecting workers' skills and productivity. So far, 5,910 employers have applied to participate in the Progressive Wage System, with 4,025, or 68.1 per cent, increasing their workers' wages and submitting claims for government incentives.

The program has benefited 51,363 workers, surpassing its initial target of 50,000, with over RM73 million disbursed in progressive wage incentives. The government also supports higher wages through the Productivity-Based Wage System and collective agreements to strengthen union-based wage models, aiming for more meaningful wage increases while increasing labour productivity through participation in upskilling training.