Malaysia mulls extending progressive wage scheme to key strategic sectors

In a Dewan Rakyat session, Deputy Economy Minister Mohd Shahar Abdullah announced that Malaysia is weighing an extension of the Progressive Wage Policy to include strategic sectors, with the aim of ensuring wage increases keep pace with productivity improvements. The proposal is embedded in the 13th Malaysia Plan, which targets raising the share of employee compensation in GDP from one outlet 33.9% to 40% by 2030 and ultimately 45% by 2033 under the Madani Economy framework.

He reaffirmed that the Productivity-Linked Wage System will remain active and that minimum-wage reviews will continue under the National Wages Consultative Council Act 2011. To meet these targets, the government plans a structural shift toward high-value, innovation-driven industries, backed by the New Industrial Master Plan 2030, the National Semiconductor Strategy and the National Energy Transition Roadmap. Emphasis will be placed on expanding technical and vocational education, upskilling and reskilling programmes, and improving job matching to create skilled, higher-paid jobs. Strengthening the National Wages Consultative Council’s role in setting starting salaries for graduates and TVET leavers is also slated, aiming to boost workers’ incomes and promote a more equitable income distribution.