Kuala lumpur: Bank Negara Malaysia (BNM) sees the country's wage growth has lagged productivity growth and believes there is a need to review its wage-setting system, particularly how adjustments to the minimum wage translate into wages at higher levels. BNM deputy governor Datuk Marzunisham Omar highlighted the ongoing issue during a plenary session titled 'The Future of Investment: Competing in A Fragmented World' at the two-day BNM's Sasana Symposium 2026 (SS2026) today.
According to BERNAMA News Agency, Marzunisham emphasized Malaysia's challenge of insufficient high-skilled jobs, with the underemployment rate for high-skilled workers being around 35-36 percent. This statistic indicates a significant portion of the workforce is employed in positions that require fewer qualifications than they possess. He suggested that creating more high-skilled jobs through investments and improving the quality of the labor force via Technical and Vocational Education and Training (TVET), Science, Technology, Engineering, and Mathematics (STEM) education, along with reskilling and upskilling initiatives, could address this issue.
Marzunisham also stressed the need to reevaluate the wage-setting system, particularly how minimum wage adjustments affect higher wage levels. Initiatives like living wage, progressive wage, and wage linked to productivity are being considered to tackle the issue of wage compression, where starting salaries for qualified professionals remain close to the minimum wage. He emphasized that the ultimate goal is for Malaysians to enjoy a good quality of life, with good jobs and reasonable incomes.
Malaysian Investment Development Authority (MIDA) chairman Tengku Datuk Seri Zafrul Abdul Aziz echoed Marzunisham's views, acknowledging the wage issue in Malaysia. He highlighted that wages should increase along with productivity and the country's economic growth. Despite low inflation and unemployment rates, many Malaysians do not feel the economic benefits, questioning the stagnation of wages despite a 5.8 percent GDP growth in the second quarter of 2026.
Tengku Zafrul praised government-linked investment companies (GLICs) and government-linked companies (GLCs) for their living wage initiatives and encouraged more companies to adopt similar measures, despite challenges such as raising the minimum wage to RM1,700, particularly among SMEs. He emphasized that improving productivity is crucial to ensuring economic growth translates into higher wages.
In a separate development, Tengku Zafrul noted that approximately 90 percent of approved investments from 2020 to the first quarter of 2026 had been implemented, showcasing Malaysia's strong execution capability from investment approvals to project implementation. He acknowledged investor satisfaction with government coordination but warned of the need for Malaysia to enhance its competitiveness as other countries advance in specific sectors.
The Sasana Symposium 2026, themed "Reforms for Resilience: Navigating Uncertainties," features discussions on key economic and financial issues, including economic resilience, wages, cost of living challenges, investments, energy security, Islamic finance, and private healthcare costs.