Graduates need to be paid a living wage, not just a minimum wage: Navaratnam

09 Apr 2019 / 16:32 H.

PETALING JAYA: Paying fresh graduates lower than what they deserve may ultimately lead to a brain drain that will further impact the nation’s economy, says Tan Sri Ramon Navaratnam (pix).

The chairman of Asli Centre of Public Policy Studies and economist said this in regards to the ongoing debate between the Malaysian Employers Federation and Bank Negara Malaysia on the proper salary scale for graduates.

“Graduates need to be paid a living wage, not just a minimum wage. Incentives for competition and meritocracy is a good way forward. Wages must rise to reflect higher standards of living as well as cost of living,“ he said.

“Employers should also discuss with their staff the company’s ability to pay higher wages for mutual satisfaction or be prepared to lose graduates to countries like Singapore and so on,“ Ramon told theSun.

“Companies are cutting off their nose to spite their own face by chasing graduates away by squeezing productivity with lesser pay just for the benefit of the company’s top level management and stakeholders,“ he said, adding that top level management personnel can be paid lesser to make way for a more decent wage for graduates than just starting at RM2,393.

Ramon said the government should commission an active wage council to iron out issues pertaining to wages amongst the government, unions and employers.

A recent news report carried a statement by the Malaysian Employers Federation (MEF) which clarified that the starting salary for fresh graduates in the private sector in the country had been gradually increasing from 2010 to 2018 as opposed to figures generated in Bank Negara Malaysia’s (BNM) annual report.

MEF presented numbers from its MEF Salary Survey for Non-Executives and Executives 2010 and 2018 which showed that a diploma holder could earn a salary of RM1,661 in 2018 compared to RM1,458 in 2010, basic degree RM2,393 (RM1,993) and master’s degree RM3,267 (RM2,923) which opposed Bank Negara’s annual report figures which showed that a a fresh graduate with a diploma could earn a salary of RM1,376 in 2018 compared to RM1,458 in 2010 while a Master’s degree holder RM2,923 (RM2,707).

Ramon said BNM’s study rightly takes into account wage increases in real terms, adding that “keeping wage increases that are consistent with inflation is not enough nor fair”.

Malaysian Trade Unions Congress (MTUC) president Datuk Abdul Halim Mansor echoed Ramon’s stand saying that the work force is under stress due to speculations and manipulation by various parties to seek profits.

“We as a developed nation should have proper manpower planning in all sectors,“ he said, adding that around half a million people enter the workforce every year.

He suggested that the government create a national labour service unit at the Human Resource Ministry - a collaboration between the education and human resource ministries that will engage schools, colleges, institutes and universities to register all students who have completed their studies.

“The Human Resource Ministry can then arrange with these former students to serve in companies for a year after which they receive a Certificate of Testimony,“ he said.

Abdul Halim said this will not only serve as a good “screening” for employers, but will also be a good addition to these graduates’ work experience.

“This is certainly better than not being employed at all,“ he added.

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