MTUC proposes cost of living allowance, urges Malaysian government to raise retirement age
The Malaysian Trades Union Congress (MTUC) has proposed an immediate introduction of an RM500 minimum monthly cost of living allowance (COLA) for all workers and increase the mandatory retirement age to 65 in its Budget 2020 proposals.
In a statement, it said there is a dire need for people-centered programs that provide protection for and uplift the economic conditions of the bottom half of the population. The demands come on the account of the ever-rising cost of living and the recent finding by the United Nations whereby Malaysia has been using an outdated and incorrect factor in determining the national poverty line. The national poverty line has been one of the factors in setting minimum wages.
As for the higher retirement age, it stated the lack of sufficient income to sustain retirement, given that the expected increase in Malaysian lifespan in the future to about 80 years with the steady rise in the aging population and the need to sustain an active lifestyle.
MTUC secretary-general J. Solomon stated that it was the government’s key responsibility to lower the cost of living to enable sustainability. He said, “The government must accept that Malaysians in the middle and lower-income levels are unable to make ends meet and those with families are actually 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.”
He also urged 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.
Current salaries for many Malaysians were far below these amounts. MTUC believes that the introduction of the COLA would be an effective move to address the current income disparity and that it would also strengthen the aggregate demand and boost economic growth in the process. Similarly, higher retirement age is expected to boost the EPF savings for those in the lower-income category and senior citizens. Both the proposals are among the six proposals MTUC had submitted for the government’s consideration on Aug 26 for Budget 2020, which will be unveiled next month.
Interestingly, in response to MTUC’s demands, the government will study the proposal to increase the retirement age from 60 to 65. Human Resources Minister M. Kula Segaran said the ministry will discuss the matter with the Finance Ministry before making a decision. Given that several developed countries including Singapore have shifted to higher retirement age, it is possible that the government might look at reviewing it favorably. Also, as the trend of higher retirement age is making waves globally given the changing nature of our jobs and a higher life expectancy, Malaysia would be well in sync with economies the world over if it goes for higher retirement age.