RM2,500 Basic Salary: An Investment in Workers and Productivity

For years, Malaysian workers have waited for their basic salaries to catch up with the rising cost of living. 

While some employers have taken the initiative to reward their employees fairly, others have been slow to act, leaving the Government to intervene.

This raises an important question: should workers have to wait indefinitely for employers to recognise that their salaries are no longer sufficient to meet their basic needs?

The proposed increase in basic salary to RM2,500 should not be viewed merely as another government policy that employers must comply with. It should be an opportunity to rethink how businesses value their employees and improve productivity.

The Government cannot be expected to look into every aspect of every business. Its responsibility is to establish a fair framework, protect workers and create conditions for sustainable economic growth. Moving forward, employers and employees must share the responsibility of building a better future together.

Higher wages, higher productivity

Employers understandably face rising operating costs and competitive pressures. However, keeping wages low cannot be a permanent solution to business sustainability. If a company can survive only by paying its workers as little as possible, it must eventually examine whether its business model is sufficiently productive and competitive.

Employers should communicate openly with employees about the need to comply with the government’s wage policy while explaining the importance of improving productivity to keep the business afloat. This must be a shared effort. Employers should invest in better technology, training and processes, while employees should be encouraged to improve their skills, solve problems and contribute ideas.

A higher salary does not automatically guarantee better performance, but we should not underestimate the motivational power of meaningful financial relief.

My experience at Union Carbide

I experienced this first-hand when I worked as a laboratory manager with Union Carbide in Senawang. When my salary was adjusted upwards by nearly RM2,000, I felt tremendous relief. I was able to concentrate better on my work and gave my best to achieving results for the company.

Two achievements stand out in my career.

The first was the development of M710, an alkali-resistant polyvinyl acetate emulsion polymer, supplied in tanker loads to ICI Paints for its Maxilite paint.

The second was R9319, a pressure-sensitive adhesive developed by Union Carbide Asia Pacific in Singapore. It encountered processing difficulties on adhesive machines, but after we modified the formulation, we were able to supply tonnes of the product to the adhesive industry.

I do not claim that a salary increase alone produced these achievements. Technical expertise, perseverance and teamwork were equally important. 

Nevertheless, the financial relief I experienced helped me focus more fully on my work. It reinforced my belief that employees who feel fairly rewarded can be better positioned to contribute their knowledge and abilities to their employers.

A shared investment in the future

Malaysia cannot rely indefinitely on low labour costs to remain competitive. Businesses must improve efficiency, embrace technology, develop skills and encourage innovation. Employees, in turn, should recognise that a company’s long-term sustainability also affects their own job security and career prospects.

Employers must not use higher wages as an excuse to impose unreasonable workloads, just as employees should not assume that higher wages alone guarantee job security. Both sides need to communicate honestly and work towards common goals.

The increase in basic salary should not be seen merely as an additional cost to employers. It should be an investment in people, productivity and Malaysia’s economic future.

The Government can set the policy, but it cannot create commitment in every workplace. That responsibility now rests with employers and employees alike. 

If both sides embrace it, a higher basic salary can become a catalyst for a more productive, competitive and equitable Malaysian economy.

This is where creativity and grit come into play. The employer who is creative in turning their business around by increasing productivity and creating new markets for their products, even to the point of asking their employees to suggest ideas, is ultimately the winner, not one who is merely trying to swim against the tide.

Malaysian businessmen should look at how China businesses are so successful by comparison. Just like in the publishing line, China’s market allows them to produce in high volume, Making their cost per unit so much lower. Perhaps it’s time for Malaysian businesses to explore the major markets such as in Indonesia and China, package their products and sell in bundles.

We have to think out of the box. Do not be surprised some of the best ideas can come from your own staff. You just have to tap into their ideas and appreciate the hard work they put in to help you in your organisation, or they will just leave you for greener pastures.