Wage hikes affect Malaysia

Wage hikes affect Malaysia

KUALA LUMPUR (AFP): Deputy Premier Anwar Ibrahim said Saturday
that Malaysia's economy was beginning to feel the heat as
workers' productivity lagged behind wage rises.

From January to April, the manufacturing sector recorded a 6.1
percent productivity increase compared with an average wage rise
of 11.7 percent, Anwar was quoted by Bernama news agency as
saying.

"This figure is not satisfactory because it shows that our
economy is beginning to feel the heat from rising wage claims and
stagnant productivity, " he told 10,000 workers at a Labor Day
solidarity gathering.

Malaysia's economic boom since 1987 has resulted in a labor
shortage in sectors like agriculture, construction and industry,
forcing employers to recruit foreigners.

The unemployment rate among the 20-million population was 2.8
percent last year, the lowest in recent years.

Anwar warned that excessive wage increase without
corresponding rise in productivity was an "unhealthy trend" which
would adversely affect economic growth, adding employers and
workers would also suffer.