General : Effectiveness Of Progressive Wage Policy To Be Evaluated End Of The Year - Akmal Nasrullah

Economy Minister Akmal Nasrullah has announced that the government will conduct a thorough evaluation of the Progressive Wage Policy by the end of this year or early next year. The policy, currently in the implementation phase, is set to conclude at the end of 2027. This assessment aims to determine its effectiveness in raising workers' wages.

Nasrullah emphasized that the policy should not merely focus on incentives for wage increases but must also improve productivity, training, and workers' skills. Employer participation should remain voluntary to accommodate the capabilities and needs of individual firms.

Despite inflation, real wages have continued to rise, as indicated by the Malaysia Salary and Wages Survey Report 2025. The report recorded a 3.3 percent increase in real wages to RM2,104. However, Nasrullah stressed that wage increases should be balanced with effective management of the cost of living, which varies by locality and household needs, including housing, food, transportation, and education.

He also noted that wage trends should be considered in the context of labor market structures, including wage compression, influenced by various factors.

Nasrullah pointed out that the wage gap between unskilled and semi-skilled workers has narrowed from RM550 in 2016 to RM396 in 2024. This suggests that semi-skilled workers' wages have not increased sufficiently at an appropriate rate. Consequently, he argued that efforts to raise wages must extend beyond the minimum wage floor by enhancing career progression and income growth opportunities for workers at higher levels.