DEBUNKED! Myths created about the ETP

False Statement 3: The ETP will effectively widen the income gap in our society. The projected wage growth by ETP is not realistic. A 3.6% annual wage growth assumption adopted by ETP is an over optimism that is divorced from the reality of economic hardships faced by our workforce.

Response: The majority of the jobs created via the ETP ie over 80 percent are in the low and middle income brackets. Jobs created will include engineers and welders in the oil and gas industry, support services in green technology, unskilled labour in the agriculture sector, technicians in the maintenance, repair, and operations (MRO) industry, and teachers in the education industry. Hence this will have the effect of narrowing the income gap, rather than widening it.

Significant improvements are required in the size and quality of the talent pool in Malaysia in order to deliver the required GNI growth in the identified National Key Economic Areas (NKEAs). The 3.3 million jobs expected to be created in these sectors will require a range of qualifications, from unskilled labour to vocational skills, diploma certification and advanced professional degree graduates.

The ETP consists of two components, the National Key Economic Areas and the Strategic Reform Initiatives (SRIs). While the NKEAs are the vehicles that will drive us to our final destination of realising Vision 2020, SRIs serve as the highway to create the conducive and competitive environment needed for businesses to thrive amidst local and global competition. The Human Capital Development SRI will cut across all 12 NKEAs to transform the workforce and workplace. This involves the implementation of strategic programmes parked under six key policy areas i.e.

1. Modernising labour legislation
2. Focusing on upskilling and upgrading the workforce
3. Strengthening Human Resource programmes
4. Leveraging on women’s talent to increase productivity
5. Undertaking a labour market forecast and survey programme
6. Enhancing labour safety net by introducing unemployment insurance

False Statement 4: The ETP will cause real wages to stagnate with only marginal increase over the years, while most of the economic benefits will be retained by corporations.

Response: Salary increases will take place when we upskill our workforce. With this, Malaysians can take higher value added jobs and move towards a more service-sector orientated economy where employee compensation contributes a larger portion of the economic output.

The Robert Walters Global Salary Survey earlier in the year revealed a projected wage increase of between 5% and 30% in Malaysia, which it attributes to a combination of inflation and market forces. Efforts under the Strategic Reform Initiatives to liberalize business conditions are hoped to allow a follow on effect of increasing competition amongst corporations for talent. Inevitably, increasing wages will be a key facet in retaining experienced staff.

Under the ETP, the government’s role will be in facilitating economic growth, whilst market forces will be the key factor in determining wages. Increases, whether through union-led negotiations or non-union, have always been determined by factors such as inflation and the consumer price index (CPI). The government has indirect influence through upgrading worker skill sets, not by directly setting wage levels.

The ETP aims to make the private sector the key growth engine of the economy. In doing so, wage levels will be increasingly market driven – as we increase the demand for talent, remuneration will certainly rise in tandem. Focus in the 12 National Key Economic Areas will further concentrate the demand for skilled Malaysians.

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