KOTA KINABALU – Sabah’s position at the bottom of Malaysia’s wage scale is largely due to small and medium sized enterprises (SMEs), which form the majority of employers in the state, being unable to provide competitive salaries owing to a lack of resources, said Human Resources Minister V. Sivakumar.
He said that the median monthly wage in Sabah stands at RM1,782, significantly lower than in the peninsula, such as in Selangor (RM2,964), Penang (RM2,627) and Kuala Lumpur (RM3,927).
Further to this, Sivakumar said Sabah still maintains the nation’s highest unemployment numbers.
“A major number of employers in Sabah comprise SMEs. They are not able to pay a high salary due to lack of resources for them to do so,” he told reporters after launching the Sabah Labour Convention and Customer Service Day held at the Sabah International Convention Centre here today.
“Although, the unemployment rate in Sabah has reduced from 9.1% to 7.7% in the first quarter of 2023, Sabah still records the highest unemployment rate, more than double the national rate of 3.5%.
“The number of unemployed individuals in Sabah is 169,800, while at the national level [it] is 588,700. This means 29% of Malaysia’s unemployed population comes from Sabah,” he added.
Sivakumar said the prevalence of long-standing traditional occupations by SMEs, coupled with geographical factors, had a significant impact on employers’ capacity to offer wages below the 2022 Minimum Wage Order (RM1,500).
Consequently, this might compel local labourers to seek higher wages by migrating either to the peninsula or overseas, he said.
He said that such a scenario could lead to a serious situation where Sabah’s dependence on migrant workers would escalate further, particularly when a shortage of local workers in the job market happened.
Sivakumar said Sabah’s economic dependency on workers not covered by the state Labour Ordinance such as the IMM13 holders, Census Certificate holders, Surat Burung-Burung, stateless persons and undocumented migrants was estimated to exceed 800,000 individuals at present.
He also expressed concern that the state could not solely rely on foreign investors as they could decide to withdraw their investments at any point, and many could lose their jobs.
“Therefore by supporting the development of local entrepreneurs, we not only create job opportunities but also enhance the capabilities of the local workforce,” he said.
He also advised youths to actively participate in economic development activities to reduce the state’s unemployment rate, especially those in the rural areas and fresh graduates.
“We want employers to pay attention to this issue. Increase employee salaries from time to time. But the government also needs to look for ways to improve infrastructure facilities to reduce the employers’ costs (to do business). Otherwise, it will be difficult to achieve our goals,” he said.
Towards this end, Sivakumar has expressed hope that the establishment of the Sabah Labour Advisory Council (SLAC) last June 14 would be able to resolve the state’s labour-related issues, which he described as unique compared to states in the peninsula.
“Through SLAC, any emerging issues should be carefully examined, and all parties within SLAC should collaborate in providing collective ideas to ensure that Sabah becomes one of the states that can provide high wage earnings equivalent to other states such as the Federal Territory of Kuala Lumpur and Selangor,” he said. – The Vibes, August 21, 2023
