Happy Labour Day 2025

I see making lives better for workers as the core of economic policy making.

Only when workers are decently compensated, we would have consumers and a middle class ready to consume, and the economy would thus be in a virtuous cycle.

For the longest of time in our discourse, there is this export-oriented industry strategy which assumes that the United States is the final destination of export, and in order to compete to export to the US, wages have to be suppressed to lower cost. The recent trade war is a clear signal that such thinking would not work anymore.

To build resilience in our economy, we need workers to be paid better so that they feel economically secured, and with this sense of security, they would be willing to consume in the domestic economy, contributing to jobs and business for others in the economy.

The old low-wage, export-oriented industry strategy is dead and we need a new model.

Malaysia’s median wage was RM3,045 in December 2024, while it was RM2,764 in October and November the same year. This is a major improvement under the Madani Government, compared to the median wage of RM2,424 in 2022.

However, Malaysian wages are generally too low and more has to be done to rectify the situation.

29.2% of formal sector workers earn less than RM2,000. Such low wages are not sustainable and not helpful in ensuring a resilient society.

In fact, Malaysian wages are “set” in Bangladesh and Singapore. We import low wage unskilled foreign labour from Bangladesh and export skilled Malaysian workers to Singapore. We will need new thinking to correct this age-old imbalance, which I will discuss at length in future writings.

As we celebrate Labour Day, let’s build an economy that pays Malaysians more decently so that our economy is not just dependent on a competitive race to the bottom to press down wages but one that is anchored on skills, technology, and productivity.