Johari Ghani: Some firms still pay TVET graduates like foreign workers despite minimum wage increase

KUALA LUMPUR, Nov 2 — Despite recent increases to the national minimum wage, some Malaysian firms are still offering local vocational graduates wages comparable to foreign workers, Malaysia's Investment, Trade and Industry Minister, Datuk Seri Johari Abdul Ghani, revealed in Parliament this morning. Johari's comments highlighted a broader reluctance among businesses to shift away from relying on cheap foreign labour, even as policymakers seek to incentivize innovation and impose quotas to encourage companies to adopt local talent.

"Some of these companies want to pay these TVET (technical and vocational education and training) graduates at the rate of foreign workers," he asserted during Question Time. "Despite raising our minimum salary to RM1,700, it still wasn't enough. Why? Because they pay those with TVET qualifications or these TVET students the same salary as foreign workers."

Malaysia has produced approximately 400,000 local TVET graduates in an effort to reduce reliance on migrant labour. However, many established domestic firms continue to offer starting salaries at the statutory minimum wage of RM1,700 per month, regardless of an employee's technical qualifications. While migrant workers typically receive employer-provided accommodation, local technicians with TVET qualifications are paid the same basic wages but must bear the burden of rental expenses for housing outside designated foreign worker housing areas.

Johari acknowledged that poor policies contribute to this issue. "On top of that, they place them inside foreign worker housing areas, yet they have to pay rent outside of those accommodation areas," he explained.