The Government will conduct a comprehensive assessment of the Progressive Wage Policy by the end of this year or early next year to evaluate its effectiveness in raising workers’ wages, Economy Minister Akmal Nasrullah Mohd Nasir said.
He said the policy was still in its implementation phase and is scheduled to run until the end of 2027, with the assessment expected to help determine its next direction.
“Currently, we are in the implementation phase. The implementation of the policy should not only focus on providing wage increase incentives, but should also be accompanied by productivity improvements, training and exposure for workers.
“Employers’ participation should also remain voluntary to ensure that the implementation of the policy can be adapted to the capabilities and needs of firms,” he said at a press conference after the Ministry of Economy’s monthly assembly here today.
Akmal also said real wages continued to grow despite the impact of inflation, citing the Malaysia Salaries and Wages Survey Report 2025 released by the Department of Statistics Malaysia yesterday.
Based on the report, real wages increased 3.3% to RM2,104.
“Even if we push for wage increases, if the cost of living is not managed properly, the increase will not have a significant or better impact. Wage figures need to be examined alongside the cost of living, which differs according to location and household needs, including rent, food, transport and education.
“Wage developments also need to be viewed from the perspective of the labour market structure, including the issue of wage compression, which is not caused by a single factor,” he said.
Akmal said the wage gap between unskilled and semi-skilled workers had narrowed from RM550 in 2016 to RM396 in 2024, indicating that wages for semi-skilled workers had not increased at an appropriate pace.
He said efforts to raise wages should therefore go beyond the minimum wage floor by focusing on career progression and higher income opportunities for workers further up the career ladder.
