Ostensibly, this direct intervention in the private sector to force wages higher will trigger a positive feedback loop — where the higher wages translate into stronger purchasing power, increased demand, more savings and new investments (expansions to meet this demand), more jobs and even higher wages, thus driving economic growth. Great stuff — if only economics were so simple.
Not since the early 1980s has the topic of inflation received so much attention on a global scale, from central banks to capital markets, academics, economists and analysts, mainstream and social media, politicians and even the man in the street. As a result, the rising cost of living has become a common lament among the people.
In Malaysia, it has once again shone the spotlight on our low wages — raising the heat on the government to intervene. That led to the progressive wage policy (PWP), which is set to undergo a dry run starting from June to September 2024. A sum of RM30 million has been allocated to the voluntary programme — employers taking part in the scheme will get a subsidy of RM200 to RM300 per month per eligible worker (those earning between RM1,500 and RM4,999 per month) for up to 12 months.
