Govt urged to opt for progressive wage modal in some sector

Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan suggested that the government go for a progressive wage model in 4D sectors (dirty, dangerous, difficult and demeaning) in order to attract local workers first.

He said issues related to skills mismatch and low wages remained the central focus as they led to low productivity, which hindered the country’s progress towards becoming a high income nation status despite the government spending money on upskilling and reskilling people.

“Being a developing nation which is robustly growing its major industries like manufacturing, plantation, services and construction, which contributes significantly to the gross domestic product and economic growth, the multi-tiered levy system may not be the right exit policy for the industries to adopt at this moment,” he said.

Nivas also said automation would not be applicable to several sector-oriented industries such as the three subsectors that require foreign labour, namely goldsmiths, barbershops, and the textile industry.

“Promoting automation and mechanisation is feasible mostly for the manufacturing line but not the service-oriented sectors,” he said referring to the barbers, goldsmiths and textile sectors that recently got approval for new recruitment and renewal permits of existing foreign workers.

Nevertheless, he said that migration to automation is practical for large enterprises but small, medium sized industries would struggle with it.

“ A lack of automation grants and the strict requirement of automation matching grants hinders most SMEs from adopting and adapting to automation,” he added.

Nivas said that these factors would impact the cost of living while businesses’ sustainability could be affected as the multi-tiered levy would increase their cost of production.