In a statement today through Bernama, the central bank said the living wage was a benchmark on the income needed to attain a minimum acceptable living standard.
“It is not a benchmark to assess the extent of poverty. In addition to meeting basic needs, the living wage also provides for a meaningful participation in society, the opportunity for personal and family development, and freedom from severe financial stress.
“It is important to understand the concept fully so that any comments on the issue will not mislead and cause confusion,” BNM said.
The opposition statement, reported on Thursday made reference to the contents of the BNM Annual Report 2017 released last month.
Klang MP Charles Santiago was quoted as saying that “the report indirectly acknowledges persistent poverty and income inequality are functions of low wages and suggests that all segments of society should benefit from the country’s wealth”.
However, the central bank said today that the living wage mainly served as a guide for employers to consider paying employees according to the needs of a minimum acceptable living standard, Bernama reported.
“The living wage does not supersede the relevance of the current minimum wage of RM920 to RM1,000. The minimum wage is legally binding and aims to address the basic needs of households,” the statement said.
BNM said the ability to pay a living wage should be assessed with due consideration to employees’ productivity, so that it does not translate into an unwarranted increase in cost that might lead to higher inflation.