Yusof Saari of the Centre for Future Studies Berhad warned that wage policies should not rely solely on general indicators per worker, saying they risk reducing wage growth to nothing more than an operational cost for employers.

Such a stance, he said, underplays the reality that many semi-skilled and low-skilled workers put in longer hours and greater effort, yet continue to receive lower pay.

“The productivity-wage discussion therefore needs to account for both wage levels (hourly and monthly), and working time,” he told FMT.

“Lower-skilled workers may appear less costly in wage terms, but they often contribute more working time to maintain their income.”

Yusof was commenting following the release of a recent World Bank report titled “Raising the Ceiling, Raising the Floor: The Jobs Agenda as a Productivity Agenda”.

According to the report, labour productivity per worker in Malaysia has increased at a slower pace than real wage growth.

However, Yusof said that Malaysia’s wage issue should not be reduced to the idea that wages were rising faster than productivity.

The more important question, he said, is whether wage growth is in tandem with efficiency across all groups of workers.

Yusof said aggregate wage growth is heavily shaped by skilled workers who are paid more and work fewer hours compared to semi-skilled and low-skilled workers, who receive lower wages despite working longer hours.

According to the World Bank report, skilled workers accounted for 56.8% of the total increase in overall mean monthly wages between 2010 and 2024, despite representing only 36.5% of wage recipients in 2024.

Semi-skilled workers, on the other hand, made up 55.4% of wage recipients but contributed 38.1% of the wage increase, while low-skilled workers made up 8.1% and contributed only 5.1%.

“This distinction is important because the policy focus should not be limiting wage increases, but stronger productivity-linked wage progression, especially for workers who form the majority of the labour market,” Yusof said.