More jobs for women, raise minimum wage to help bottom 40% in Budget 2016

October 26, 20157:02 am596 views

Putrajaya has been urged to find ways to increase the minimum wage and regulate salaries between male and female employees in Budget 2016 so as to help the low-income group in the bottom 40% of households.

Institut Rakyat executive director Yin Shao Loong suggested a minimum wage increase to at least RM1,200 to make it close to a living income.

“In terms of short-term direct measures, the minimum wage is overdue for a review, especially given sharpening inflation following implementation of the goods and services tax (GST) and the fall of the ringgit,” he told The Malaysian Insider.

For longer-term measures, Yin suggested that the government look into higher value-added industries, such as manufacturing, which, he noted, had been abandoned for the services industry.

“In the longer term, the government needs to have a serious and credible plan for boosting wages through employment in higher value-added industries, such as innovation-led manufacturing disciplined by export competition.

“By effectively abandoning manufacturing growth and accepting the dominance of services in the economy, we can look forward to weaker wages as wages in the service sector tend to lag behind manufacturing. In short, Malaysia needs an industrial policy that will strengthen our manufacturing sector,” he added.

Prime Minister Datuk Seri Najib Razak said Budget 2016, to be tabled in Parliament today, will ensure that the bottom 40% (B40) household income group continued to have opportunities for and access to higher education and skills training so that they have stable and better jobs.

He said the budget would also make provisions for the B40 households to enjoy affordable houses, higher income, acquisition of wealth and quality of life.

But given that women, especially single mothers, form the largest group of people in the poor category, better policies are needed to enable women to gain and sustain employment, a women’s rights activist said.

According to 2007 Economic Planning Unity Poverty Line Income, 89% of single mothers fall under the poor category. Out of that number, 66% are hardcore poor. The mean income of single mothers in urban areas is RM490.34 while in rural areas it is RM334.73.

Women’s Aid Organisation (WAO) executive director Sumitra Visvanathan urged the government to look into community-based and subsidized childcare services.

“Let’s make it possible for mothers to work. Childcare is key. Many women cannot travel to work with their children, so workplace crèches are meaningless for them. Imagine a woman, with no family support and on a minimum wage, who has young children. How will she work, without childcare support?

“WAO and women’s groups have consistently called for community-based and subsidized childcare, with a strong framework to manage and monitor them. This could be the best solution but has been ignored for too long by policy-makers,” she added.

The inability of women to join the workforce is due to lack of access and is evident by the stagnant rate of labour force participation, she noted.

“The labour force participation rate has been stagnant for far too long, hovering at between 45% and 47%. Access to work opportunities must be made real and meaningful.”

To address income inequality, Sumitra also called on the government to come up with strong initiatives to regulate wages, so that men and women are paid equally for the same work.

“The gender wage gap is a critical problem. Our current laws and policies seem to tolerate this inequality. Unless strong will is shown by the government to end this, women will continue to be unable to remain, consistently, in employment.

“They will also remain unable to earn a fair wage for work done. This breeds continued income inequality for women,” she said.

“Women, like single mothers and the elderly, must have those special needs acknowledged, understood and responded to. What is needed is a holistic, coordinated and evidence-based strategy that seeks to include all, and recognises that some groups require special measures to eliminate income inequality.”

Yin added that the clampdown on labour rights could also lead to the suppression of wages, noting Malaysia’s rank as one of the worst countries in the world to work in.

“Increasing taxes while wage growth is slow and inflation is climbing is extremely burdensome to low-income consumers. The GST combined with the sharp depreciation of the ringgit has been driving up inflation and punishing low-income consumers.

“Since Putrajaya said that it has exceeded its expected collection of GST, it should consider a moratorium on GST until the ringgit stabilises.

“Following that, since it is now hard to undo the system, the GST could be re-introduced at a lower rate of 3% until wages strengthen to cope with the indirect tax burden,” the PKR think-tank executive director said.

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