By Ronald Benjamin
THE Association for Community and Dialogue (Acid) is concerned that the Perikatan Nasional government’s aid in the form of the Wage Subsidy and Employment Retention Programmes is not helping businesses retain workers.
This issue was articulated by Yong Poh Koon, honorary adviser to the Malaysian Consortium of Mid-Tier Companies, as published in The Star today.
It is obvious that mid-tier companies, which comprise more than 200 workers, are not benefiting from the said aid. The load seems to be heavy on employers and employees.
According to the Federation of Malaysian Manufacturers in an April 20 survey, 78% of those polled have retrenched or intend to retrench at least 30% of their employees. Why is there a need to retrench when there is the Wage Subsidy Programme?
The human resources minister revealed that as of May 1, Socso had received 27,222 applications from employers involving 230,652 employees who would claim benefits under the Employment Retention Programme. This figure represents 1.5% of the workforce.
Such a large number of claims shows that a category of employees whose salary is RM4,000 and below has been on unpaid leave for a full month. Socso, which initially came out with a statement that it is ending the retention programme due to a lack of funds, retracted it. This shows there is a financial burden to sustain the scheme for six months, and it is widely debated within Socso.
The question is, are the Wage Subsidy and Employment Retention Programmes sustainable, and will they be able to reduce retrenchment? The answer is clearly no, based on the survey mentioned and the financial strain on companies to pay even half of workers’ salaries due to poor internal and external economic conditions.
This would lead to more unpaid leave, encouraing retention programme claims among those who salary is RM4,000 and below. It would financially drain the programme.
Therefore, Acid urges the government to increase wage subsidies to 50% of one’s salary, and also cover mid-tier companies, not just small and medium enterprises. Our Wage Subsidy Programme is offering a far lower amount than the schemes in other countries, which are offering 70% to 80%.
The economy will not grow if consumer spending continues to be poor, and spending is not possible when there is going to be an increase in claims for the Employment Retention Programme, and if mid-tier firms are unable to afford staff salaries.
There will be an exponential rise in retrenchment if the government fails to top up wage subsidies. – May 5, 2020.
* Ronald Benjamin is secretary of the Association for Community and Dialogue.
* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight.
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