LETTER: The latest Department of Statistics Malaysia (DOSM) figures show the median monthly wage of formal sector employees stood at RM3,027 in March 2026.
About 25.9 per cent of formal employees were earning below RM2,000 a month and employees aged between 45 and 49 recorded the highest median monthly wage at RM4,100.
While this suggests that earnings tend to be higher among certain experienced age groups, it also raises a question about how much wage progression workers actually experience throughout their careers.
Of course, age alone does not represent experience or skill level, and these figures do not necessarily indicate that wage compression has occurred. We would need more detailed data across occupations, qualifications and years of experience to understand the situation better.
It is also important to recognise that increasing the minimum wage can have a positive spillover effect.
Some employers may adjust the salaries of employees earning slightly above the minimum wage to maintain reasonable differences between job positions and responsibilities.
However, such adjustments are not automatic. They depend on employers’ financial capacity, labour market conditions and the demand for skills.
For larger companies, there may be more room to review the overall salary structure. For smaller businesses, particularly those already facing higher operating costs, adjusting wages across different employee categories may be more challenging.
This is why the discussion should go beyond simply increasing the minimum wage. We also need to look at how wages progress over time.
An employee who continues to improve his or her skills, performs well and takes on greater responsibilities should have a reasonable opportunity to earn more.
This is particularly important as Malaysia continues to emphasise upskilling, reskilling and the development of a highly skilled workforce.
We encourage young people to pursue higher education and workers to continuously improve their competencies. Naturally, they would also hope to see these efforts reflected in their earnings.
At the same time, the solution is not for every employer to increase everyone’s salary by the same percentage. That may not be financially sustainable, especially for small and medium enterprises.
Instead, employers should be encouraged to review their salary structures and establish clearer wage progression based on skills, experience, job responsibilities and productivity.
The Progressive Wage Policy could complement the minimum wage policy in this regard, if employers receive sufficient support to improve productivity and strengthen their capacity to pay higher wages.
The broader issue is how we can ensure that wage growth remains meaningful at different stages of a worker’s career.
Raising the minimum wage is important because it protects those at the bottom of the wage distribution. But we should also ensure that graduates, skilled employees and workers who have invested years in developing their experience are not overlooked.
Ultimately, we should not only be concerned about how much workers earn when they first enter the labour market, but also how far their wages can grow as they progress in their careers.
The challenge is not just to raise the minimum wage, but to ensure that the overall wage structure continues to recognise skills, experience and productivity.
We need to raise the wage floor while making sure the wage ladder continues to move upwards.
ASSOCIATE PROFESSOR DR RASIDAH MOHD RASHID
Dean, School of Economics, Finance and Banking
Universiti Utara Malaysia