Sunday, May 3, 2015

Overpaid lawmakers?

Recent statistics from the Employees Provident Fund (EPF) reveal that one third of Malaysian workers earn less than RM 1,000 per month and about 40% earn less than RM 2000 per month. The lower wage growth for low income wage earners occurs in an environment of stagnant wage share of national income. The wage share of national income has actually declined from 33.8% in 1970 to 32.9% in 2012 while at the same time corporate profits increased from 50% to 67% of national income. There is a clear disparity between labor productivity and wages. Annual wage growth is about 2.6% despite labor productivity increasing at 6.7% which reveals labor market inefficiencies and depressed wages due to weakened collective bargaining power and poorly regulated migrant labor. This is a critical challenge which we need to be concerned about for sustained productivity-led growth.

Contrast this with the recent hefty salary increases that our lawmakers awarded themselves (presumably in rare unanimity between the ruling and opposition lawmakers). The new monthly salary of about RM 16,000 which supplemented by allowances could reportedly be up to RM 35,000 does seem extravagant especially given the current economic challenges and the national debate on GST and the minimum wage. In very simple terms, this means that a typical Wakil Rakyat will earn about 18 times more than the typical worker in his or her constituency. To stretch this point a bit further, an elected representative could take home about 40 times the national minimum monthly wage.

The rationale for the increase is to quote the Minister: “the duty of MPs is getting heavier in carrying out the high hopes of the people, and the increase will boost the spirit of the elected representatives to work with more commitment and dedication”. Presumably this heavier duty includes staying awake in the middle of the night to sneak through repressive legislation to further stifle fundamental liberties of the people who elected them in the first place. One would think that elected representatives who lack commitment and dedication will be booted out by their constituents and that should be sufficient incentive to boost their spirits. Not to mention the lucrative licenses, contracts, business deals and other rewards that at least most BN MPs seem to consider as their entitlement.

There is no question that our lawmakers need to be compensated appropriately especially in order to discourage corruption. Not to begrudge the salary increases but I think it is only fair that we demand more from them. To start with, every elected representative needs to publicly declare his or her wealth and income. It would also help to have transparent performance metrics such as an annual report card so that the electorate can tell which representative lacks commitment and dedication. And yes, presumably lawmakers will be equally generous when they decide on what the new national minimum wage should be this year.


No comments:

Post a Comment