The COVID-19 pandemic has caused an unprecedented global economic and labour market crisis, affecting millions of workers and businesses. Some businesses have opted for unpaid leave or pay cuts due to closure or limited business operation hours.
However, the continuous resumption of economic and social activities during the second half of last year, as well as creative business models and the government’s policies and initiatives, such as the National Economic Recovery Plan, the Wage Subsidy Program, and several grants and financing programmes, partly contributed to the increase in median and mean monthly salaries & wages.
The median monthly salaries & wages recovered from a double digit decrease of 13.3 per cent to RM1,894 in 2020, to a rebound of 9.1 per cent to RM2,250 in 2021. Similarly, the mean monthly salaries & wages turned around 3.5 per cent to register RM3,037 after recording a decline for the first time in 2020 (-9.0%; RM2,933).
The Department of Statistics Malaysia stated that by economic activity in 2021, all sectors recorded an increase in median monthly salaries & wages in 2021 compared to 2020 except for the Construction sector. Mining & quarrying sector remained to record the highest median monthly salaries & wages at RM3,921. This was followed by the Services sector (RM2,550), Manufacturing (RM1,976) while, Agriculture (RM1,490), continued to be the lowest median since 2010. In terms of mean monthly salaries & wages, all sectors recorded an increase in 2021 as compared to the previous year, except for the Mining & quarrying and Construction sectors.
Meanwhile, the Mining & quarrying sector recorded the highest mean in 2021 which was RM5,040 (-0.5%), followed by the Services sector (RM3,254; +4.9%), Manufacturing (RM2,606; +2.5%) and Construction (RM2,347; -8.2%). In the meantime, mean monthly salaries & wages in the Agriculture sector remained the lowest at RM1,776.
The resilience of Malaysia’s Foreign Direct Investment (FDI) inflows was demonstrated when the country surpassed its pre-pandemic performance with RM48.1 billion in 2021 compared to RM32.4 billion in 2019 (2020: RM13.3 billion). Malaysia remains an attractive investment destination for global investors, with the Manufacturing sector maintaining its position as a key pillar of the economy for 2022, generating significant multiplier effects on the nation’s growth.
All these show that Malaysia’s new investment policy prioritises high-value investment over high-tech investment, which offers more job opportunities for Malaysians. Investments that are ‘innovation and productivity driven’, provide ‘quality employment’ and demonstrate ‘high economic complexity’ are examples of principles that may be used to assess the quality of potential investments.
This would ensure secure employment with real prospects of high-value, high-salary work.
The World Economic Forum’s “Future of Jobs Report 2020” found that the COVID-19 pandemic has significantly accelerated the digitisation of work processes, increasing the need for employees to upskill and reskill their digital skills.
Digitalisation offers rich opportunities for economic transition and industrial upgrading, including productivity growth, new market opportunities, new jobs, greater work-life balance, and higher pay. However, one of the main obstacles to embracing digitisation is funding, employee skills, and insufficient technology knowledge or exposure.
Therefore, the SME Digitalisation Grant has been launched to encourage SMEs to adopt digitalisation in their business operations. Through this initiative, the government will provide companies with a 50 per cent matching grant, up to MYR 5,000 (approx. EUR1,100) for the subscription of digital services that will enhance their productivity and competitiveness. In addition, the government also provide talent training programmes to upskill/re-skill/top-up skills in critical high-skill and high-value areas via the National Apprenticeship Scheme (SPN), SOCSO JaminKerja Employment Incentive, InvestKL Fit4Work, the Peneraju Skill 2.0, and MyDigitalWorkforce Work in Tech (MYWiT), as examples.
Given the importance of labour in advancing the economy, the salaries & wages are a crucial motivator that will influence productivity. Sustained salaries & wage growth can be achieved by building an economy that prioritises generating work with decent salaries & wages while moving up the value chain by leveraging digital solutions such as artificial intelligence (AI) and robotics to boost productivity, culminating in higher-paying and productive jobs that can provide a subsistence standard of living.
This may also attract the outside labour force to join the labour market and reduce the level of underemployment.
