3,640 petrol stations set to implement minimum wage

70% of workers at petrol stations throughout the country are foreigners.

Don't you think it's about time the operators start implementing the self-service system? Afterall, having a lot of people manning the petrol stations doesn't really make your trip there a lot more convenient. At least not for me.


Higher benefit for 50,000 gas station workers

A total of 3,640 petrol stations throughout the country will implement the minimum wage order, which is to take effect this coming Jan 1.

Petrol Dealers Association of Malaysia (PDAM) president Datuk Hashim Othman said with this, the current minimum monthly wage of RM600 to RM700 would be raised to RM900 for Peninsular Malaysia and RM800 for Sabah and Sarawak.

However, he said, the implementation of the minimum wage would increase the petrol stations' operational costs by 30 per cent.

"The increase in costs not only involve the workers' salary, but also EPF, Socso and overtime payments," he told a press conference, here, today.

The government has fixed the minimum wage in the private sector at RM900 per month or RM4.33 per hour for Peninsular Malaysia and RM800 or RM3.85 per hour for Sabah, Sarawak and the Federal Territory of Labuan.

Due to higher operational costs, PDAM is urging the government to review the commission rates received by petrol station operators to lessen their burden.

Hashim said the last review was made in 2008 with the commission rates set at 12.19 sen per litre for RON95 petrol and seven sen per litre for diesel.

Meanwhile, he urged all petrol stations to fully implement the self-service system from Jan 1 to reduce their operational costs.

"The directive on self-service exists as it was issued in 2006 but many operators are not following it," he said.

Hashim said with self-service, PDAM expected the number of hired foreign workers at the petrol stations to be reduced by 50 per cent.

To date, about 70 per cent of the 50,000 workers at petrol stations throughout the country are foreigners. - Bernama

Are private sector minimum wages of RM900 and RM800 fair?

It's a done deal, let's move on.

We know that the setting of minimum salary of RM900 for Peninsula Malaysia and RM800 for East Malaysia and FT Labuan was met with some reluctance from many employers especially the small to medium businesses. It is understandable considering the risk of losing business on the part of the employers, and employment on the part of the employees.

Increased fixed overhead may force enterprises to scale down to achieve optimal efficiency and workers get retrenched in the process.

Our wish is that all of these companies have room - and can make room - for increasing production so that the inevitable increase in minimum salary can be absorbed less painfully. But not every business is as flexible and the prospect of winding up is a real possibility if no drastic measures are taken.

That said, I am all for a fixed minimum salary. In a way the Government had paved the way for (or rather forced) the private sector to revise wages of employees on the tail end.

But wait a minute, every employee is a salaried worker. When you revise salary, it should be across the board. It should involve every one of every rank, no matter the quantum of change.

Image by New Straits Times. The PM with the HR Minister during the announcement.

Do it across the board

For instance, prior to the minimum salary gazette, a General Worker earned RM600, an Operator earning RM1,000 , and a Supervisor on RM1,500. When the RM900 minimum salary is enforced the General Worker would be on a RM900 payroll, pretty close to what the Operator is taking home. Therefore he will want a raise too, and so will the Supervisor. There is a domino effect on the company financially as well as the morale of the workers.

So, yes, do it across the board. Not just the lower end of the salary structure. You may say that it is too much to implement and some may even say I am out of my mind!

We have to start somewhere, anywhere

Let's look at this from a slightly different perspective.

When I say across the board, I was referring to a thought of mine about starting it with the bigger corporations, especially government-linked companies (GLCs) and government-owned enterprises. In fact GLCs are the perfect private entities to start off with. These GLCs and government-owned companies run and operate just like other private companies, except for the fact that when they make profit they will give part of it to the government in the form of dividend. When they lose money, they face the risk of being dissolved.

There are many profit-making GLCs and large government-owned companies that contribute to the government coffers and these profits form part of the fund utilised in the recent public service salary revisions. Remember, in the last 5 years there were at least two significant salary revisions in the public sector.

It is only fair that the government make the first move and give 'suggestions' to the BOD of these GLCs to take the initiative to implement the minimum salary and revise the same across the board. Other large conglomerates and private companies can then take cue of that initiative.

TheGreenMechanics' two cents:

Give the partly-private employees what they deserve. Implement the minimum salary now and revise the other ranges of salary too. As for other privately owned companies, it is a good gesture to follow suit, having considered every other options.

Read the rest of the news:-

RM900 minimum wage for peninsula
TUESDAY, MAY 01, 2012 - The Malay Mail

PUTRAJAYA: The government has fixed the national minimum wage at RM900 for the private sector, ending months of speculation and debate over the quantum. Announcing this, last night, Prime Minister Datuk Seri Najib Razak said the new rate will be implemented six months from the date of gazette.

However, owners of micro-businesses and small enterprises will be given one year to comply.

“This is to help them sufficiently prepare for the overhaul in the wage structure,” he said at the Putrajaya International Convention Centre, yesterday.

The one-year period isn’t applicable to professional companies such as law firms and dental or medical clinics, although they have five or less employees. The collective decision, he said, was reached after discussions and reviews among representatives from the government, employers and employees, all of whom form the National Wage Consultative Council.

“The main factor behind the implementation of the minimum wage scheme is to ensure that private sector workers have a respectable quality of life,” he said.

The RM900 a month is equivalent to RM4.33 per hour. The minimum wage in Sabah, Sarawak and Labuan Federal Territory, meanwhile, is capped at RM800 a month or RM3.85 an hour.

The minimum wage, however, does not include those in domestic service such as maids and gardeners.

The wage structure was proposed after taking into account studies by the World Bank, which included such factors as the cost of living, poverty line index, median range, productivity and unemployment rate. In the last 10 years, average wages in Malaysia have seen an increase of only 2.6 per cent annually, and Malaysia lagged behind other countries that have set a minimum wage standard.

Close to 33 per cent of workers in the private sector are believed to be earning less than RM700 a month, which is below the poverty line. The plan has met with opposition from employers, citing fears that it could put 200,000 small businesses and four million jobs at risk.

The Malaysian Employers Federation in March called for the scheme to be introduced in stages to allow productivity to increase instead of creating a one-time shock to the market.

Source

Where are you on the global pay scale?

Selected Highlights

Luxembourg - is the country with the highest national average wage, $4,089
Tajikistan      - is ranked lowest (72nd), average wage $227
Malaysia,      - ranked 45th, has an average monthly wage of $961
Singapore      - is ranked 10th, average wage of $2,616 almost identical with that of Australia's (11th)
The other two ASEAN nations included in the ILO's calculation:
Thailand        - ranked 62nd with average monthly wage of $489
Philippines    - ranked 70th, average monthly wage $279

If you are living in Malaysia, in order for you to be earning an equivalent of Luxembourg's average wage, you need to be drawing a salary of RM8,833.00 a month. Head on over to BBC News Magazine and type in your monthly salary to find out where you are on the global pay scale.

ILO said that the world average wage is $1,480. Do you earn more or less than the world's average wage?

The average wage, calculated by the International Labour Organization (ILO), is published by BBC for the first time. It's a rough figure based on data from 72 countries, omitting some of the world's poorest nations. All figures are adjusted to reflect variations in the cost of living from one country to another, and it's all about wage earners, not the self-employed or people on benefits.

Image: BBC News Magazine

Note: The figures in this histogram are given in Purchasing Power Parity (PPP) dollars. One PPP dollar is equal to 1 US dollar spent in the US. In other countries, 1 US dollar can give you more purchasing power than if you are in the US.

E.g. with US10.00 you can buy more food of the same description in Malaysia than if you were to be in the United Kingdom.

RM700 - Get your own accomodations

I wrote about my opinion on the illogical One maid, one task decision in my previous entry. I'll add to that post my further take on the minimum RM700 maid salary.

Image credit.

By setting yourself a minimum salary of RM700 per month, doing only the task you are trained for, you are in your own right a professional. You are governed by a structured work ethics, a guaranteed fixed salary structure including compensation for working outside of your stipulated working hours. This is exactly what the the Indonesian Ministry of Manpower and Transmigration set out in its training to prepare aspiring maids to work in Malaysia.

Common sense would have it that for the above to have taken place, the worker (in particular, the maid) is a competent, self-sufficient employee just like anyone working for someone else. As such, the maid is expected to:

1. Provide for his/her own accommodation, probably by renting a house or room nearby. Or, rent a room in the employer's home.
2. Provide for his/her own meal. Buy all the groceries he/she need and never touch a single piece of rice in the employer's kitchen
3. If he/she is renting a room in the employer's home, he/she will provide for her own cooking utensils.
4. In-house entertainment. A maid is not allowed to turn on any TV, media players, computers, etc without the employer's verbal permission.
5. Like any other professions, a maid is subjected to disciplinary actions when he/she violate the working ethics and job descriptions.

Now that would be harsh, tense or at least 'too formal' for a housemaid who is expected to bond a fairly good tie with the employer and the children under his/her care. You don't want to go to that extent so why set a condition to your prospective employer in the first place.

Let the market sort out the demand-and-supply issues

A job is a contract that both parties agree to. If there is big demand for certain job, supply will be short and price will be higher. So be creative and source for locally available supply,  or from oversea supply elsewhere where talent requirement is similar at less demanding cost.

One maid, one task not logical

"If a maid is employed as a cook, she will only be tasked with chores related to cooking and will not be doing any other duties such as babysitting or washing clothes," - Dr Reyna Usman, during a task force's meeting at the Indonesian Ministry of Manpower and Transmigration, Jakarta.

Daily Express - Mar 17, 2012

Okay, this is not in line with the understanding achieved by the two nations, according to Human Resources Minister Datuk Seri Dr S. Subramaniam. But if it is going ahead as stated by Indonesian Minister Dr Reyna Usman then employers are likely to have to hire 4 maids to cater for the different chores:

1. Cooking
2. Babysitting
3. Taking care of the elderly
4. Housekeeping

In most cases families would take care of the elderly and the more likely scenario is to have maids for babysitting, cooking and housekeeping.

So, here is what I think will happen:

Different maids for cooking, babysitting and housekeeping: RM700 x 3 = RM2,100
Cost to hire maids ( one time, to hiring agencies, etc) = RM4,511
Overtime payment if working on rest days = RM27/day

Rest day per week: 1 day
Passport: To be kept by the maids

By spreading the cost for hiring into 36 months (3 years), it is an equivalent to RM125 per month and add this to the monthly wages of RM2,100 and the employer ends up paying RM2,225 every month for the next 3 years. Is this the scenario you want to put yourself in?

No, thank you

No, not for me. RM2,225 can go a long way. I will hire a local who would be happy to do all 3 chores at RM800 - RM900 per month, give the maid a 1 day of every weekend, and I can make use of the remaining RM1,425 to pay for a brand new car of my choice, or pay my home loan.

My local maid won't need any passport and I do not have to worry about a maid running away to a better paying employer. 

Human Resource Ministry partly to blame!

The reason why locals are reluctant to become household maids is that there is no salary structure or scheme and no clear employment benefits put in place by the Human Resource Ministry. If there's one, and there is minimum wages for maids then it will become a profession.

It takes a bold move from other countries for the government to start thinking about solving the maids shortage in Malaysia. Why foreigners? Why not locals? Are we locals really not that interested in this kind of profession? I don't think so. Given the right working condition, and a clear framework for remuneration, anyone would do it. It is similar to the construction and plantation industries.

What do you think?

To be fair to the Indonesia government, this may have been the current practice and arrangement with other countries where its maids are deployed to. But if it's not then we have every right to question such move and reject the seemingly illogical decision.

If you think locals are hard to deal with, or problematic and lazy, it makes very much sense to look elsewhere other than Indonesia.

Private Sector Minimum Wage Set Below RM1,000

The inevitable has now been made known - the private sector is set to have minimum wage. While the public sector have seen at least a couple of wages reviews or changes in the salary scheme quite recently, employees of the private sector have not seen any light to the very question of minimum salary.

As the title suggests, minimum wage is set below RM1,000.00 and I will not blame you if you now begin to wonder. I myself am puzzled. Below RM1,000 can mean anything from a single Ringgit to RM999 although it would take a dumb to think about figures towards the low end.

 

Image: MalaysianInsider

Datuk S.Subramaniam: “There will be a minimum wage below RM1,000 as the minister has said before and the Cabinet has approved it.”

The Malaysian Insider online news reported today (Mar.3, 2012) that the Cabinet has agreed to set a minimum wage of below RM1,000 for the 3.2 million workers in the private sector, with a RM100 difference between states in the Malay peninsula and Sabah and Sarawak, sources say.

The Malaysian Insider understands that the Najib administration decided on a regional difference in wages rather than sectoral differences although some sectors will be excluded from the policy. Selangor under Pakatan Rakyat (PR) rule has set a minimum wage of RM1,500 as demanded by most unions but opposed by employers.

Read the full article here.


In Brief

If reading a lengthy article is not your cup of tea, the following table is the summary of what I understand from the report:

Who will be affected	3.2 million workers in the Private Sector
Minimum wage	Below RM1,000
Condition*	RM100 difference between states in Peninsula Malaysia and Sabah/Sarawak
Initial demand by most Unions	RM1,500
Exception	Selangor has set minimum salary at RM1,500
Current  average salary:-
Sabah	RM577
Sarawak	RM758
Peninsula Malaysia	RM1,131
Estimated 33% of private sector workers	Earning less than RM700

My Personal Opinion

Some people say let the demand-and-supply determine the salary in the private sector. While partly agreeing to such subscription, it is also worth looking at the public sector over supply of staff. One can look at the ratio of public servant to total population in developed countries and it is not hard to see that Malaysia has a significantly higher ratio.

Similarly, productivity of labour, be it in the public or private sector, must increase with the increase in remuneration. Towards this end, have we seen any significant increase in production in the public sector (or GLC) after the recent salary scheme revision? That is the similar question when determining the minimum salary for the private sector.

We have seen reluctance on the part of the employers every time the workers ask for minimum wage. This brings about the general perception that Malaysian employers prefer to bring in foreign workers at the expense of the local workers. Foreign labours normally cost lesser to employ and thus employers maximise their profit that way. I hope this is wrong but it is what many perceive as happening.

What makes you think that given proper salaries, local will not take up the hard and tasking jobs currently dominated by foreigners? Plantation, construction, manufacturing (factories), to name a few. Make it a policy to first give the jobs to Malaysian and not to the cheap imported labour. It will cost higher but that's the only way for this country to become a high income nation in 2020. That is what the regulator (government) is there for - to ensure that the people get remunerated properly while seeing to it that employers are still making profit.

Lastly, when the minimum wage is implemented, wages revision must be carried out across the board. Workers in the lower rank would no doubt be affected (in a good way), but those in the higher ladders should benefit equally.