[PS] The decrease of the labour income share to 32% is shocking, LLRC calls for a government roadmap to achieve the 45% labour income share

Press statement by the Labour Law Reform Coalition on 17 August 2023 in Shah Alam

The Labour Law Reform Coalition is shocked to learn from the Madani Economy document that Malaysia’s labour income share has dropped to 32.4 per cent in 2022, a sharp decrease from the 35.2 per cent in 2017 (BNM Annual Report 2018). That means, the workers’ share of the economy has rolled back to the status in 2011 after the Covid-19 pandemic.

Although the Covid-19 pandemic has severely and negatively impacted the jobs and incomes of Malaysian workers, LLRC had highlighted before that low unionisation rate and lack of appropriate bargaining mechanism at workplaces during the pandemic would lead to wage cuts unilaterally imposed by employers.

In addition, the decrease of the labour income share is also attributed to the lack of a concrete roadmap of the previous governments. The ambitious 48% target of labour income share stated in the Shared Prosperity Vision 2030 (SPV2030) remained elusive, a casualty of the absence of a resolute roadmap and audacious strategy to guide the way. As a result, the SPV2030 was doomed to fail.

The Madani government must learn from the previous mistakes and create a concrete roadmap for achieving the 45% labour income share in the next 10 years. Among other measures, they should have a national action plan on trade union development as a step to strengthen trade union bargaining power, which will certainly lead to higher wages and benefits for workers in Malaysia.

Trade unions act as the voice of the workforce, campaigning for equal treatment, improved working conditions and greater remuneration. The efficacy of these unions, however, is strongly based on a supportive legislative framework and dedicated involvement by the government.

We urge the government to step up to the challenge and a course consistent with the Madani values of fairness, inclusion, and social advancement. The Madani government has a chance to guide the country towards a future in which workers’ wages and benefits reflect the full value of their contributions. It is a vow to respect economic ideals of equality and justice.

N. Gopal Kishnam & Irene Xavier


Labour Law Reform Coalition


Note : Labour Law Reform Coalition is endorsed by 58 Trade Unions from various sectors and worker organisations. The group started in June 2018 to initiate discussion on labour law reform based on ILO’s decent work framework. The coalition had submitted proposals of reforming Employment Act 1955, Trade Union Act 1959 and Industrial Relations Act 1967 in January and May 2019 respectively.

Gopalkishnam Nadesan is the General Secretary of National Union of Transport, Equipment and Allied Industry Workers (NUTEAIW), and former Secretary-General of Malaysian Trade Union Congress. Irene Xavier is a veteran social activist who founded Persatuan Sahabat Wanita Selangor, she has been fighting for the rights of women workers for decades.

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