PETALING JAYA: It will be unwise for the government to increase the minimum wage of civil servants to RM1,800 if it does not wish to be saddled with a big financial burden, according to economists.
Universiti Tun Abdul Razak’s Prof Dr Barjoyai Bardai pointed out that if it decides to approve the salary increment, the government might be forced to fork out billions of ringgit in additional funding each year to accommodate this.
He said while he agreed that the current minimum wage of RM1,100 was too low, particularly for those residing in major cities, there are other measures that can be taken to cushion the rakyat’s burden.
“We have about 1.6 million government servants. If the RM1,800 minimum wage comes into force, then I estimate about one million staff’s salary will have to be reviewed, with an average increment of around RM500.
“That will cost the government about RM500 million per month, or RM6 billion a year,” he told theSun yesterday.
“This will add to the country’s fiscal deficit. And this is an issue, particularly as Malaysia attempts to come to grips with the economic downturn,” he said, adding that it could also have a negative impact on the private sector and contribute to an economic imbalance.
Barjoyai was commenting on Congress of Unions of Employees in the Public and Civil Services’ (Cuepacs) proposal to fix the minimum salary of civil servants at RM1,800 a month.
Cuepacs president Adnan Mat said on Thursday that the suggestion was made based on several aspects, including the rising cost of living.
Deputy Human Resources Minister Datuk Mahfuz Omar said the government would consider the proposal, but added that it would depend on its affordability and the private sector employers’ capability.
Barjoyai instead suggested that the government use funds intended for the wage increment as a grant for civil servants who wish to start their own business.
He said this would, in the short, medium and long-term, help the individuals to generate their own income and the government to boost economic activity.
“We can’t just spend billions on increment because there’s the question of productivity. If the additional RM6 billion spending can be justified through economic and financial return, then it’s okay,” he said.
Independent economist Dr Baayah Baba said the proposed RM1,800 minimum wage was too much for the government to bear, claiming RM1,500 was a more reasonable amount.
“However, this is not the time to make such changes. The government should wait until the economy improves, maybe in the next year or two,” she said.
