The Malaysian government will conduct a comprehensive evaluation of the Progressive Wage Policy by the end of the year to assess its effectiveness.
PUTRAJAYA: The government will conduct a comprehensive assessment of the Progressive Wage Policy by the end of this year or early next year to evaluate its effectiveness in raising workers’ wages, said Economy Minister Akmal Nasrullah Mohd Nasir.
He said the policy is currently in the implementation phase and is scheduled to conclude at the end of 2027, making the assessment important in determining the government’s next course of action.
“We are currently in the implementation period. The Progressive Wage Policy is scheduled to end in late 2027, so we will conduct a comprehensive assessment by the end of this year or early next year,” he told a press conference after the Ministry of Economy’s monthly assembly here today.
Akmal Nasrullah said the policy should not focus solely on incentives for wage increases but must also be accompanied by improvements in productivity, training and workers’ skills.
He said employer participation should remain voluntary to allow implementation to be tailored to the capabilities and needs of individual firms.
Meanwhile, he said real wages continued to grow despite inflation, citing the Malaysia Salary and Wages Survey Report 2025 released yesterday by the Department of Statistics Malaysia (DOSM), which recorded a 3.3 per cent increase in real wages to RM2,104.
“Even if we push for wage increases, if the cost of living is not managed effectively, the rise will not yield a significant or beneficial impact,” he said.
Akmal Nasrullah said wage levels must therefore be assessed alongside the cost of living, which varies according to locality and household needs, including housing, food, transportation and education.
He also said wage trends should be viewed in the context of labour market structures, including wage compression, which is influenced by multiple factors.
He noted that the wage gap between unskilled and semi-skilled workers had narrowed from RM550 in 2016 to RM396 in 2024, indicating that wages for semi-skilled workers had not increased at an appropriate rate.
As such, he said efforts to raise wages must go beyond the minimum wage floor by strengthening career progression and income growth opportunities for workers at the next level.
