MTUC proposes RM500 cost of living allowance, higher retirement age

KUALA LUMPUR: The Malaysian Trades Union Congress (MTUC) has proposed an immediate introduction of a RM500 minimum monthly cost of living allowance (COLA) for all workers and to increase the mandatory retirement age to 65 in its Budget 2020 proposals.

There is a dire need for people-centred programmes that provide protection for and uplift the economic conditions of the bottom half of the population, it said in a statement.

In justifying the need for the COLA, the National Labour Centre cited the ever-rising cost of living and the recent finding by the United Nations whereby Malaysia has been using an outdated and incorrect factor in determining the national poverty line. The national poverty line has been one of the factors in setting minimum wages.

As for the higher retirement age, it cited the lack of sufficient income to sustain retirement, the expected increase in Malaysian lifespan in the future to about 80 years with the steady rise in the ageing population and the need to sustain an active lifestyle.

MTUC secretary-general J. Solomon said it was the government’s key responsibility to lower the cost of living to enable sustainability but historically, whatever commodity that went up in prices never came down.

“The government must accept that Malaysians in the middle and lower income levels are unable to make ends meet and those with families are actually struggling. We are not asking for higher take-home wages; we are only asking for real wage. The UN findings show that the poverty rate is as high as 15% to 20%, and this has direct relevance to low wages.

“We also urge the government to consider the Bank Negara report which states that a working bachelor in Kuala Lumpur needs a minimum of RM2,700 a month to enjoy a decent living while a married couple with two children has to earn about RM6,500,” he said, adding that current salaries for many Malaysians were far below these amounts.

According to him, it is now timely for the Government to consider the real living wage.

He said while the government needed to consider the living wage to compensate what had been shortchanged to the B40 and M40, there was an immediate need to grant all workers of B40 and M40 a COLA of RM500.

The private sector, he said, had no valid reason to delay, having enriched itself from this incorrect poverty line income for many years; consequently, this had caused the wide income inequality in Malaysia.

“It is their moral obligation to compensate the workers who have been shortchanged and made to suffer for many years,” he said.

Solomon said these were was among the six proposals MTUC had submitted for the government’s consideration on Aug 26 for Budget 2020, which will be unveiled next month.

He said the introduction of the COLA would be an effective move to address the current income disparity and the pittance minimum wage, adding that it would strengthen the aggregate demand and boost economic growth in the process.

“With the current low wages and the high cost of living, workers are in a ‘make or break situation’. The RM500 would be a major boost for the B40 and M40 categories of workers who are the hardest hit,” he added.

As for the call for higher retirement age, Solomon said this would boost the EPF savings for those in the lower income category and senior citizens who could then depend less on their children, society and the government for old-age support.

“The government needs real political will and the ability to influence the employers to empathise with the workers and fulfill their social obligations by addressing the workers real need,” he said.

MTUC strongly urges the government to implement the proposals immediately so that all workers in B40 and M40, across the board will have a great relief for them to be finally compensated, Solomon said. - Bernama