MTUC proposes RM500 allowance, higher retirement age

The Malaysian Trades Union Congress (MTUC) is calling for the introduction of an RM500 minimum monthly cost of living allowance (Cola) for all workers, and for the mandatory retirement age to be increased to 65 in its Budget 2020 proposals.

There is a dire need for people-centric programmes that provide protection for and uplift the economic conditions of the bottom half of the population, the congress said in a statement today.

In justifying the need for the Cola, MTUC cited the rising cost of living, and the United Nations's recent finding that Malaysia has been using an outdated measure to determine the national poverty line. 

The national poverty line is one of the factors used to set the minimum wage.

As for the higher retirement age, MTUC cited the lack of sufficient income to sustain retirement, the expected increased lifespan of 80 years, and the steadily ageing population.

MTUC secretary-general J Solomon (photo) said it was the government’s key responsibility to lower the cost of living to enable sustainability, but historically, any commodity that has gone up in price does not come down.

"The government must accept that Malaysians in the middle and lower-income levels are unable to make ends meet, and those with families are struggling. 

"We are not asking for higher take-home wages; we are only asking for a real wage. The UN findings show that the poverty rate is as high as 15 percent to 20 percent, and this has direct relevance to low wages.

"We also urge the government to consider the Bank Negara report which states that a working bachelor in Kuala Lumpur needs a minimum of RM2,700 a month to enjoy a decent living, while a married couple, with two children, has to earn about RM6,500," he said, adding that current salaries for many Malaysians were far below these amounts.

According to Solomon, it is time for the government to consider the real living wage, and an immediate need to grant all B40 and M40 workers a Cola of RM500.

The private sector, he said, had no valid reason to delay, having enriched itself from this incorrect poverty line income for many years, which had consequently caused the wide income inequality in Malaysia.

“It is their moral obligation to compensate the workers who have been shortchanged and made to suffer for many years,” he said.

Solomon said these were among the six proposals MTUC had submitted for the government's consideration on Aug 26 for Budget 2020, which will be unveiled next month.

He said the introduction of the Cola would be an effective move to address the current income disparity and the pittance minimum wage, adding that it would strengthen the aggregate demand and boost economic growth in the process.

“With the current low wages and the high cost of living, workers are in a ‘make or break situation’. The RM500 would be a major boost for the B40 and M40 categories of workers who are the hardest hit,” he added.

As for the call for a higher retirement age, Solomon said this would boost the EPF savings for those in the lower-income category, and senior citizens who could then depend less on their children, society and the government for old-age support.

"The government needs real political will and the ability to influence the employers to empathise with the workers, and fulfil their social obligations by addressing the workers' real needs," he said.

- Bernama

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