Putrajaya launches national wage index for productivity, wage benchmark

PUTRAJAYA, Feb 19 — The first National Wage Index (NWI) was launched by Human Resources Minister M. Kulasegaran today, the culmination of a study that has taken the better part of two years at least.

He said the index will be a useful market indicator to set wages for workers, alongside other economic considerations including the Consumer Price Index and the productivity index.

“It can be a guide for employers and investors in drawing up the structure and level of wages for certain jobs, besides being an input for human resource policies,” Kulasegaran said at the launch here.

The index, which is based on the participation of 3,000 private sector firms nationwide, is the culmination of a study by the Human Resources Ministry in November 2016.

Conducted by the Institute of Labour Market Information and Analysis, the index covers 169 types of jobs that make up 80 per cent of the main occupations in Malaysia.

Kulasegaran said the index’s open and transparent analysis of the workforce also means it can be utilised as a benchmark for other matters, including the bargaining power of workers.

“It will also be used by workers’ associations, thereby increasing the collective bargaining power of workers.

“This marks the first time ever in Malaysia’s 62-year history that such an index has been launched,” he said.

Prior to the NWI, employers used their own internal systems to determine an employee’s productivity and subsequent wage increments.

“Although it is not compulsory and functions more like guidelines, the NWI encompasses entire industries and as such is more accurate. Bear in mind other developed countries also use a similar system,” Kulasegaran said.

The index is a stepping stone for the national workforce, but he said more also needs to be done.

“For example we should encourage more women to join the workforce, especially mothers.

“Likewise we should give more chances to employees over 60 years old due to their work experience, perhaps by granting them more flexible working hours,” Kulasegaran said, adding he would also like to see more opportunities given to disabled persons to join the workforce.