Salary and wages in Malaysia.
Ghani, Rohayu Abd. ; Arshad, Rasidah ; Idris, Fazli 等
This paper discusses the compensation practices in Malaysia against
the backdrop of the legal framework for wage and salary deterination. It
also examines the Malaysian labour market situation and trends in salary
and wage administration together with the role of unions in compensation
determination.
INTRODUCTION
Malaysia is a country of more than 20 million located at the
southernmost tip of mainland Asia. Besides being a leading exporter of
commodities such as natural rubber, tin, palm oil, timber, petroleum,
and natural gas, Malaysia is also one of the world's leading
exporters of electronic semiconductors, room air-conditioners, and
audiovisual equipment. Prior to July 1997, Asia was seen as a region
exemplifying success in economic growth and development. Between 1991 to
1996, the Malaysian economy grew at an average rate of more than 8%.
However, Malaysia could not shield itself from being negatively impacted
by the 1997 Asian Financial Crisis where the nation suffered a 7.5%
contraction in its Gross Domestic Product (GDP) in 1998.
In 2000, Malaysia had a workforce (defined as persons between 15-64
years old) of slightly above 9 million. About 60% of the workforce were
below 35 years of age. Union members accounted for about 8.15% of the
labour force. Unemployment was reported at 3% of the labor force, and
foreign workers accounted for one out of every seven jobs (Malaysia
1996-1998, 1996).
This scenario shapes the Malaysian labour market condition. Until
1997, the salary and wage rate in the country had experienced a
significant growth. This was a result of the rapid economic growth and
near perfect employment. This paper will discuss the salary and wage
practice in Malaysia. It will begin by describing the legal framework
for wage and salary determination. It will then describe the Malaysian
labour market and trends in salary and wage administration in the
country. An examination of the role of unions is also included.
LEGAL PROVISIONS ON WAGE AND SALARY DETERMINATION
The legal framework for salary and wage payment in Malaysia is
governed by the Employment Act 1955. The Act defines wages as basic pay
and all other cash payments made to employees for their contract of
service. The following payments, however, are not included as part of
wages:
* The value of any house accommodation, the supply of any food,
fuel, light or water, and medical attendance.
* Contributions paid by employers on their own account to any fund
or scheme established for employees' benefit or welfare including
pension fund, provident fund, superannuation scheme, retrenchment scheme, termination scheme, layoff scheme, retirement scheme, and thrift scheme.
* Traveling allowance or the value of any traveling concession.
* Any sum payable to employees to defray special expenses entailed
on them by the nature of their employment.
Under the Act, payment of wages must be made no later than the 7th
day after the last day of a wage period. A wage period must not exceed
one month, and unless this period is specified in a contract of service,
it is deemed to be one month. That is, employees are paid at least once
a month. Employers, however, may pay wages at shorter intervals, say
once a week or once every two weeks.
The Act specifies that when an employer terminates an employee
without notice, the wages owing to the employee must be paid no later
than the day the service is terminated. If it is the employee who
terminates the service without notice, payment must be made within 3
days from the day of such termination. If termination is with notice by
either the employer or employee, wages must be paid by the end of the
notice period.
The Employment Act does not govern every aspect of wages. For
example, wage rates or levels are not regulated by the Act but are
determined through negotiations between an employer and an employee or,
in the case of unionized companies, between the representatives of the
company and the trade union. However, wage determination for some
employees, such as hotel and restaurant workers, are subject to the
minimum wage requirements of the Wage Councils Ordinance 1947.
Malaysia's Industrial Court and Industrial Arbitration
Tribunal, in some of their judgments, have indicated some factors that
should be considered in determining wage rates and wage levels. In one
Industrial Court case, the Court determined that in fixing wage levels,
employers should (a) compare their wage levels with that of similar or
related industries; (b) consider whether their wage levels are fair,
giving due consideration to the cost of living; and (c) take into
account their financial capacity to meet such wage levels. In another
case, the Industrial Arbitration Tribunal stated that due consideration
should be given to the following factors in determining wage and salary
levels and increases: (a) the cost of living, (b) the wages and salaries
paid by comparable establishments in the same region, (c) any
inconsistencies in the wage and salary structure of the company itself,
and (d) the financial capacity of the company to institute wage and
salary increases. In addition, the Tribunal opined that emp loyers
should consider factors such as labor productivity, prevailing wage rates in similar industries in the same region and the present economic
condition as well as the future prospects of the industry in determining
wage levels (Ayadurai, 1985).
EMPLOYMENT TREND IN MALAYSIA: 1990-1999
The rapid economic growth in Malaysia between the period 1990-1999
was accompanied by a shift in labor force utilization in the country.
One noticeable shift was the reduction in the percentage of the work
force employed in the agriculture sector. Data published by The Labor
Force Survey Report 1999 by the Department of Statistics shows that
certain sectors experienced significant changes in their share of total
employment between 1990-1999 (refer to Table 1).
The percentage of people employed in the agriculture, forestry,
livestock and fishing industry dropped from 26% of the total national
employment in 1990 to 18.4% by 1999. The biggest increase was
experienced by the manufacturing sector, which saw its share of total
employment rise from 19.9% in 1990 to 22.5% in 1999. Major increases
were also experienced in the construction sector and the sectors
classified as financial, insurance, real estate and business services.
The property boom during this period led to the increase in the
percentage of people employed in the construction sector. The growth in
this sector needed to be supported by the financial service sector which
explains the increase in the finance, insurance, real estate and
business services sector.
THE MALAYSIAN LABOR MARKET.
The main labor markets in the country are located in the major
industrial areas (refer to Table 2). The Klang Valley is the biggest
industrial area in the country and covers Kuala Lumpur, the capital
city, and the neighboring towns of Petaling Jaya, Shah Alam and the port
town of Klang. These three towns are located in the state of Selangor.
The Klang Valley Periphery covers areas in Selangor outside the
Klang Valley, as well as the neighboring states of Negri Sembilan and
Melaka. The industrial areas in these states have been developed mainly
in the last 10-15 years. At the southern tip of peninsula Malaysia is
the JB industrial area. JB is the acronym for the town of Johore Baru
which borders Singapore. Many Malaysians in Johore Baru work in
Singapore. As such, the labor market condition here is affected by the
conditions in Singapore.
In the northern part of the country are two major industrial areas.
The first is Penang, which is one of the oldest industrial areas in the
country. This covers the Penangisland and the adjacent area on the
peninsula. The second industrial area is the Northern Plains, which
covers the states of Perak, Kedah and Perlis which borders Thailand.
Like the Klang Valley Periphery, this area was developed in the last 15
years. The last major labor market is the east coast of Malaysia. This
is a new area and is expected to be the next growth area. This area is
also a major oil producing area and is home to many petrochemical plants.
FACTORS AFFECTING SALARY LEVELS IN MALAYSIA
Several factors have been identified as contributing to the
increase in pay offered to employees in Malaysia. The tight labor market
is a major factor causing the increase in pay among occupations. In the
JB area, the close proximity to Singapore and the increased mobility of
workers create a condition whereby companies in the area have to compete
with Singaporean companies for Malaysian workers.
Tight Labour Market
Malaysian employers compete for the same number of workers. As more
foreign investments flow in, more jobs are being created. For instance,
in the production related sector alone, an increase of 57.2% new jobs
was reported in 1996 (Seventh Malaysia Plan, 1996). Foreign investment
under the Sixth Malaysia Plan (1990-1995) was RM80 billion, and under
the current Seventh Malaysia Plan (1995 - 2000) is expected to reach
RM120 billion. Although the government has encouraged the intensive use
of modern technology in exchange for human labor, the dependence on
labour still continues.
An indication of the tight labour market is reflected in the
consecutive reduction in the number of job seekers. The number of active
job seekers registered with the Manpower Department dropped from 54,387
in 1990 to 23762 in 1997 (Siaran Perangkaan, 1998: 27). The number of
new job seekers also dropped from 11,939 to 7,524 in 1995 and increased
slightly to 9,127 in 1997 (refer to Table 3).
Proximity to Singapore
Singapore offers comparatively higher salaries than its neighbors.
The attractive salary offered has attracted a considerable number of
Malaysians to work there. Malaysian employers in the JB area not only
have to compete with their Malaysian counterparts for workers but also
with Singaporean employers.
Singapore currently employs about 200,000 Malaysians of whom 50,000
commute daily to the island republic (New Straits Time, May 24, 1997).
The figure represents about 13% of the total work force in Singapore.
Those who commute daily to work in Singapore are able to gain the
benefit of a higher pay in Singapore while at the same time enjoy the
lower cost of living in Malaysia.
Most Malaysians work in the manufacturing, construction and service
industry. In August 1996, the Singaporean government decided to exempt
foreigners from contributing to the Central Provident Fund (CPF). The
contribution is a compulsory deduction from the employee's pay,
which is kept in a retirement fund. This decision will attract even more
Malaysians to work in Singapore. This is because the exemption will give
Malaysian workers in Singapore a bigger take home pay and make it more
attractive to continue working there. However since the economic
slowdown affecting the region has also affected Singapore, it is
unlikely that more Malaysians will be able to seek employment in the
republic. Given Singapore's emphasis on the high-tech sector, new
job creation will be mainly for professionals and engineers.
Influx of Foreign Labor
Until 1997, Malaysia was a major importer of foreign workers. It
was reported that the number of legal foreign workers was 750,000 in
1994 and the number of illegal workers was 500,000. In 1996, the number
swelled to about 900,000 legal workers and one million illegal workers
(Fernz, 1997). The economic slowdown has caused the country to review
its policy of depending on foreign workers. Malaysia has pursued a more
active policy of repatriating illegal workers since 1998.
Although the general perception is that foreign workers cost less,
the Federation of Malaysian Manufacturers (FMM) disagrees (Yeow, 1997).
Employers have to incur various costs such as preparing paper work
before getting the required approvals from the relevant authorities and
pay high levies to the government before they can hire foreign workers.
The FMM explained that reliance on foreign workers does not in any way
reduce the cost to employers.
The number of skilled foreign professionals and expatriates has
also increased due to the increase in foreign investments and a shortage
of Malaysians who can fill professional and managerial positions.
According to the Director of Employment Pass and Foreign Labor Division
of the Immigration Department, a total of 29,958 expatriate posts were
approved in 1996 as compared to 14,991 posts in 1995 (The New Straits
Times, March 7, 1997).
As mentioned earlier, the view that the use of foreign workers is
less costly and may moderate salary level has limited truth. Among the
blue collar laborers the cost of foreign workers is not necessarily
lower. As for professional and managerial positions, the use of
expatriates is more costly and provides a higher ceiling by which
Malaysians compare their salary. Even then, this impact is limited to
only certain employment categories.
Increased Mobility of Malaysian Workers
Workers in urban areas such as the Klang Valley, Penang, and the JB
area are paid better than those working in the rural areas. As an
example, a salary survey by the Malaysian Employers' Federation in
1996 showed that the average monthly salary of top executives in Penang
is RM14,268 This is about the same as the average salary of top
executives in JB (RM 15,050). These amounts are far above the average
salary of top executives in the East Coast who were paid RM9,400 or the
Northern Plain who were paid RM11,034.
The salary differences between various parts of the country attract
people to areas offering a higher rate. Malaysian workers have a
tendency to move to those high-paying areas. According to a Department
of Statistics report, Selangor, which borders the Klang Valley
industrial area and where Klang Valley Periphery is located, recorded
the highest number of internal migrants (Report on Migration 1995,
1996). Internal migrants refer to locals migrating within the country.
The data also show a similar trend with most of the internal migration
in Malaysia being from other areas to the major industrial areas. This
has the effect of raising the salary of workers in the newer industrial
areas. In the long term, one can expect salary differences between the
industrial areas in Malaysia to become smaller.
COMPARISON OF MANAGERIAL SALARY FOR SELECTED AREAS FOR 1994-1996.
A survey by the Malaysian Employers Federation (MEF) found that on
average the salary given to employees in managerial positions (i.e. from
executives to the top managers) has increased substantially during the
period of 1994-1996 (Malaysian Employer Federation Compensation and
Salary Survey, 1996). (1)
This salary increase was experienced by employees at all managerial
levels during this period (refer to Table 4). A number of distinct
trends can be noted from the data. It can be seen that the largest
salary increase was experienced by positions in the JB and Klang Valley
Periphery area. The Northern Plain area also saw large increases for top
management positions. The large increase in JB can be attributed to the
competition from Singapore. Many Malaysians are attracted by the higher
pay in Singapore, which is only about a half an hour drive from JB. The
Klang Valley Periphery and Northern Plain consist mainly of relatively
new industrial areas and upward adjustments in the salaries are needed
to attract experienced managers to move to these areas. It can also be
due to the need to reduce the attraction of opportunities elsewhere for
their senior and top managers.
Table 5 shows that there has been an increase in the percentage
average salary increase for 3 of the 4 levels of managerial positions
for the 1995-1996 period compared to 1994-1995.
In addition to the comparison between regions for the selected
occupations, data available indicate a shift in the breakdown of
labour-related expenses in Malaysia. Data collected from 171
manufacturing and service firms in 1995 by Rozhan and Zakaria (1997)
showed that the average labour cost of Malaysian companies is made up of
74% salary and wages, 11% incentives and 15% benefits. Another survey
involving 108 manufacturing firms done at Universiti Kebangsaan Malaysia in 1998 showed that 69% of the labour cost is spent on salary and wages,
9.4% on benefits, 17.6% on incentives and 4.6% on other forms of
compensation. This seems to suggest a greater emphasis on the use of
incentives in the compensation practice of Malaysian firms. This may be
due to the slower productivity increase experienced in 1996.
WAGE AND PRODUCTIVITY
Any attempt to understand the impact of the salary trend needs to
take into account productivity growth. The Eighth Malaysia Plan reported
that salary and wage increased by an average of 6.8% per year for the
period of 1995-2000. Labour productivity based on sales increased at an
average rate of 10.4% per year for the same period. This contributed to
a decrease in per unit labour cost by 3.2% on the average. Labour
productivity growth based on GDP per worker for the manufacturing sector
during the period was 1.6% whereas for the agriculture sector it was a
modest 1.5% per year during the same period (The Eighth Malaysia Plan,
2001).
In 1999 productivity in the manufacturing sector grew at 9.1%
(1998: -9.4%), employment at 4.0% (1998: -4.7%) and output at 13.5%
(1998: -13.7%). Increased in export and local demands are responsible
for the growth. Meanwhile labour cost per employee grew at 6.5% and unit
labour cost decreased by 6.7%. This reflects the increased productivity
of the manufacturing sector. Table 6 shows the trends in the
productivity growth, labour cost per employee and unit labour cost in
the manufacturing sector for the period of 1995-1999. The trend shows
that productivity on average lagged behind the growth of real labor cost
per employee.
Output and productivity growth in the service sector were on the
average 6.44% and 3.2% respectively for the period 1995-1999. The
service sector is a major contributor to employment and provided 47.2%
of the overall total employment in 1999 (1998: 47.3%). The agriculture
sector is facing a continuing shortage of manpower that causes the
decreases in the growth rate of 5.6% for the period of 1991-98. Despite
the shortage, the labour productivity has grown at a very encouraging
rate of 4.18% on average since the last three decades (1961-1998).
The current wage system that is rigid and not based on productivity
weakens firms' performance in facing the fluctuation in demand for
output. This variation in demand translated to the fluctuation in
employment. This was evident during the slow economic performance in the
mid of 1980s and the economic crisis of 1997-1999 where employers laid
off some of their workers in order to reduce their cost in respond to
slow demand in output. The National Economic Recovery Plan of 1998
suggested the implementation of a wage system that is flexible and
productivity-based. Table 7 shows the variation in employment that can
be related to the fluctuation in GDP.
UNIONIZATION AND SALARY DETERMINATION
Any discussion about salary and wages will not be complete without
examining the role of trade unions. As described earlier, union members
constitute 15% of the workforce in 1996 but the number has decreased to
only 8.15% in the year 2000 (Ministry of Human Resources, 2001). In
Malaysia, the National Labor Advisory Council (NLAC) is the highest
forum on labor affairs. The MEF represents the employers in this
council. The Malaysian Trade Union Congress (MTUC) represents the
unions. MTUC has 166 affiliates representing about 600,000 workers.
Government employees are represented by the Congress of Unions of
Employees in the Public and Civil Service (CUEPACS).
The number of wage agreements in the private sector had increased
from 188 agreements in 1991 to 226 agreements in 1996 (2). Table 7 shows
the percentage average wage increment agreed upon between employers and
unions during this period. The trend shows an increase in the percentage
average increment agreed upon by both parties. This is reflective of the
tight labour market discussed earlier, which leave employers with little
choice but to accommodate to union demands.
To moderate this situation, in August 1996 the NLAC formulated
guidelines on wage reform. The purpose of the guideline is to provide
principles for employers and unions in negotiating wages and other
benefits. The most important part of the wages reform is that wage
increment which commensurates with employee productivity and company
performance.
Three specific issues are addressed in the guidelines. First, wages
should consist of fixed and variable components. Fixed payments are paid
on a monthly basis or a more frequent period. The variable components
are yearly increment, bonus or other infrequent payments. Second,
changes in basic salary or fixed payment should consider relevant
factors, such as cost of living, and reflect the value of the job.
Third, the variable components, such as wage increase, must take into
account a company's profitability and the performance of the
individual employee or group of workers or organization. The wage
increase should be less than productivity growth.
Although these moves were intended to bring wage increase to a more
reasonable level, it is uncertain whether the guidelines had the
intended effect. This is partly because the guidelines provided nothing
new and practically all of the principles set forth have been defined by
either legislation or court decisions. Another reason is that the Asian
currency and economic crisis essentially reduced the need to worry about
unreasonable wage increases. Unions are now more concerned about
protecting what they have.
FUTURE TRENDS
July 1997 marked an important moment for many Asian countries. The
Asian miracle was unraveled and became more like a debacle. Beginning
with Thailand, one Asian country after another succumbed to the attack
on their currency. Malaysia was no exception. The Malaysian ringgit fell
from an exchange rate of RM2.5 to the US dollar to around RM3.7. The
glut in the property market, which began as early as the end of 1996,
caused a slowdown in the industry. Financial institutions found
themselves saddled with non-performing loans. This led to a slowdown in
the Malaysian economy. However, the present outlook of the economy, as
indicated by the positive economic development of the country as well as
the region, has allowed the Malaysian government to place a forecast of
5% growth in 2000 for its economy. Some analysts may be less optimistic.
The Ministry of Human Resource reported that 83,865 employees were
retrenched in 1998 (Labour Market Report, June 2001). This is a major
increase compared with 18,863 retrenched for 1997 (The Star, April 21,
1998). The hardest hit were companies in the manufacturing, construction
and property sector. However, the market has improved and the Ministry
reported that in the year 2000 retrenchment has lowered to 25,236
employees.
During the economic crisis and the period immediately following it,
many of those still with jobs found themselves taking a salary cut or
freeze. The government implemented a cut in the allowances given to
civil servants. The merger of financial institutions that is still in
progress, as directed by the country's central bank, is expected to
cause around 10,000 people to lose their jobs. Export oriented manufacturing companies were the least affected by the economic slowdown
in 1997-1998. The weaker ringgit made their products more attractive.
Even if this did not translate into higher orders, the payment in US
dollar that these companies received gave them a bigger margin.
However, by early 2001 this began to change. The decline in the
currencies of Malaysia's neighbours began affecting Malaysia's
export performance. With the ringgit pegged to the dollar, Malaysian
exports are now more expensive compared to her neighbours. Even though
Malaysian businessmen are quietly urging the government to devalue the
ringgit, the prime minister is stubbornly insisting on the current
RM3.8:USD1.
In spite of the optimistic forecast of the Malaysian government,
the quarterly data released by Malaysia's central bank continues to
see lower than expected economic performance. Uncertainty is still a
main concern. The slowing of the US economy in 2001 is already affecting
the Malaysian electronics industry which is very dependent on the US
market. Malaysia's Human Resource Minister reported that about
15,000 workers in Malaysia have lost their jobs between November 2000
and April 2001 as the US economic slowdown starts biting. Eighty percent
of those laid off worked in the electronic and manufacturing sectors
(AFP, 2001).
The currency control imposed by the Malaysian government in
September 1998 has also reduced its attractiveness to foreign investors
who wanted to have free flow of capital. Even when the government
abolished restrictions on capital flow early this year to attract more
funds into the stock market, foreign fund managers simply packed their
bags and left. The Kuala Lumpur Stock Exchange composite index continues
it yoyo movement at around half of its pre-July 1997 level (Shameen,
2001). Given the choice between Malaysia and her neighbors, investors
are finding the neighbors to be more attractive investment destinations.
For those seeking low costs, Thailand is the favourite destination. For
those looking for a large pool of educated work force needed for
high-tech and high value-added activities, Singapore and even the
Philippines are seen to be more attractive. Malaysia is seen to be
trapped in a no man's land. It cannot compete on cost and neither
can it offer the kind of workforce needed to support a high-te ch
industry. Malaysia's much vaunted Multimedia Superhighway Corridor
which was supposed to be an IT hub is deemed a failure (Malaysia's
"Super Corridor" Fails, 2001). Even the Malaysian Prime
Minister admitted this (MSC's Contribution Still Low, 2001).
Equally important is the political turmoil that Malaysia is going
through. Since the Prime Minister expelled and then persecuted Anwar
Ibrahim, his expected successor, in 1998 there has been a steady erosion
of support for the ruling coalition. While political change is itself
natural and should not be cause for concern, the oppressive response of
the current ruling coalition is causing worries about the possibility of
turmoil. A survey of MNC executives conducted by Executive Intelligence
Review found that Malaysia is one of two Asian countries expected to
become a less attractive investment destination in the next 5 years.
This uncertainty is also reflected in Standard and Poor's decision
to downgrade Malaysia's rating last April (S&P Downgrade
Malaysia, 2001). The opening of the Asian Free Trade Area (AFTA) will
reduced tariff and protected industries will find themselves having to
compete with more efficient ones from neighbouring countries. In the
short-term there'll be considerable effort to cut cost a nd salary
rates in Malaysia may see a downward trend.
In the long-term, Malaysian companies will have to increase
productivity and this will see an increase in demand for professional
and technical workers. An upward trend can be expected in the salary of
certain job categories. Given this scenario, there is considerable fear
of what lies ahead. The approach of the Malaysian government is to fund
economic growth through debt. While this may give a temporary boost, it
does not address the issues relating to the decline in investors'
confidence. The variables impacting future salary trend in Malaysia will
be complex. This includes the local condition as well the expected
changes resulting from the implementation of AFTA. The spectre of
uncertainty and increased unemployment is something that is taken
seriously by more Malaysians. The slowing down of the economy and
rationalization of certain protected industries, such as the automobile
industry, as AFTA is implemented is expected to lead to higher
unemployment. We can expect considerable volatility in the Malaysi an
labor market in the next few years with salary trend behaving
erratically.
ENDNOTES
(1.) Note that in Malaysia thc term executives refers to entry
level managers. Some companies have the position of senior executives as
the next level, followed by the position of manager and senior manager.
Top management usually refers to those holding the title of general
manager, managing director, executive director and chief executive
officer.
(2.) More recent data is not available at the time this paper was
completed.
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Table 1
Percentage of Employment According to Sectors.
Sector 1990 1995 1999
Agriculture, forestry, 26 20 18.4
livestock and fishing
Mining and quarrying 0.4 0.6 0.4
Manufacturing 19.9 23.3 22.5
Electricity, gas and water 0.7 0.6 0.6
Construction 6.3 8.0 8.2
Wholesale, retail, 18.2 17.9 18.8
restaurant and hotel
Transport, storage 4.5 4.7 4.8
and communication
Finance, insurance, real 3.9 4.8 5.3
estate and business services
Community, social and 19.9 20.3 21.1
personal services
Table 2
Areas in the Major Labor Markets.
Area Cities and states
Klang Valley Kuala Lumpur and its
suburbs
Klang Valley Periphery Parts of Selangor and
the states of Negri
Sembilan and Melaka
JB State of Johore
East Coast States of Kelantan,
Terengganu and Pahang
Northern Plain States of Kedah, Perak
and Perlis
Penang Island of Penang and
adjacent areas on the
mainland.
Table 3
Registered Job Seekers With the Manpower Department.
Year 1990 1991 1992 1993 1994 1995 1996
Active Job
Seeker 54,387 50,199 42,344 31,617 26,445 25,546 21,688
New
Registrants NA 11,939 9,214 9,128 8,596 7,524 7,897
Year 1997
Active Job
Seeker 23,762
New
Registrants 9,127
NA: Not available
Table 4
Percentage Salary Increase for Selected Positions According to Region
Between 1994- 1996
Top Senior Middle Executives
Managers Managers Managers
Klang Valley 18.9% 15.5% 4.7% 12.4%
Klang Valley 50.3% 62.3% 26.9% 26.2%
Periphery
JB 67.6% 42.8% 40.4% 10.1%
East Coast 6% 45.5% 2.2% 0.9%
Northern Plain 56% 6.7% 21% 3.5%
Penang 59% 57.5% 6.8% 18.7%
Source: Malaysian Employers Federation Compensation and Salary Survey
1996
Table 5
Overall Percentage Salary Increase For Selected Positions From 1994-1996
Top Senior Middle Executives
Managers Managers Managers
1994 to 1995 11% 15% 2.2% 5.3%
1995 to 1996 24.3% 12.2% 16.5% 12.4%
Source: Malaysian Employers Federation Compensation and Salary Survey
1996.
Table 6
Percentage growth in labor cost per employee, productivity, and labor
cost per unit of manufacturing sector
1995 1996 1997 1998 1999 (e)
Labor cost per employee 5.22 9.28 6.9 0.56 6.46
Productivity 2.2 9.7 2.6 -9.4 9.1
Unit Labor cost -1.61 2.7 1.6 3.74 -6.68
Source: National Productivity Report, 1999
e: estimates
Table 7
Percentage Growth of GDP, Employment and Productivity
1994 1995 1996 1997 1998 1999 (e)
GDP 9.1 9.6 8.5 7.8 -7.5 5.6
Employment 3.0 3.0 2.8 2.2 -4.9 1.67
Productivity 6.1 6.6 5.7 5.6 -1.8 3.86
Source: National Productivity Report, 1999
e: estimates
Table 8
Private Sector Wage Agreements.
Year Wage Agreements Percentage Average
Wage Increase
1991 188 7.9
1992 180 8.9
1993 161 8.3
1994 197 10.0
1995 257 11.7
1996 226 12.3