Workers' wages yet to reach target
SHAH ALAM - The Department of Statistics Malaysia (DoSM) confirms that the workers' wage rate in the country is considered low as it has not reached the government’s target of 40 per cent of the Gross Domestic Product (GDP) value.
Chief Statistician Datuk Seri Mohd Uzir Mahidin said there was no drastic change in the trend of Malaysian workers’ wage to GDP where the contribution percentage was 34.8 to 37.1 per cent.
“The 2021 GDP Income Approach report stated that the wage and salary rate of employees showed an increase of 1.3 per cent from 35.8 per cent in 2018 to 37.1 per cent in 2020.
“However, in 2021 the rate of wages and salaries of workers decreased by 2.6 per cent from 37.1 per cent (2020) to 34.8 per cent (2021) with a total of RM537.9 billion.
“The growth in the rate of wages and salaries of workers in GDP until 2020 was positive. However, we have not reached 40 per cent as targeted by the government,” he told Sinar Premium.
He explained that the wage rate in Malaysia was still low compared to other Asian and Southeast Asian countries like Singapore, the Philippines and South Korea.
“In 2021, workers’ wages in Malaysia were the lowest compared to the Philippines with 36.7 per cent of the GDP value, Singapore (39.4) and South Korea (47.9).
“Meanwhile, a majority of developed countries have an employee wage rate above 40 per cent, namely the United States with 54.2 per cent, Australia (47.7) and South Africa (46) in the same year,” he said.
Uzir said the service sector remained the largest contributor towards the overall wage and salary expenditure of workers in Malaysia.
He said the compensation to employees included remuneration in the form of cash or non-cash which must be paid by an enterprise to the workers in return for the work done during the accounting period.
“The service sector contributed 62.8 per cent which is lower than the 63.5 per cent recorded in 2020 while the manufacturing sector’s contribution increased to 23.3 per cent from 22.5 per cent in 2019.
“The construction industry contributed 7.5 per cent followed by agriculture at 4.3 per cent and mining and quarrying at two per cent in 2021,” he said.
Meanwhile, workers wages and salaries have recorded a positive growth of 2.2 per cent in 2021 from a decline of three per cent the previous year.
“We saw in 2021 the wages and salaries of workers contributed the most in the construction sector with 72.6 per cent followed by services (40.3), manufacturing (34.6), agriculture (15.7) and mining and quarrying (8.6),” he said.
Although the wage and salary growth rates showed positive developments, it had shrunk marginally by 0.9 per cent compared to the pre-pandemic in 2019.
“Net taxes remained down eight per cent compared to negative 30.2 per cent in 2019. The moderate decline was driven by the higher taxes on production and imports.
“Subsidies grew by 28.7 per cent following various economic stimulus packages announced by the government to boost the domestic economy at the time,” he said.
