China's Wage Hikes Ripple Across Asia
Wall street Journal | By JAMES HOOKWAY in Kuala Lumpur, PATRICK BARTA in Bangkok and DANA MATTIOLI in New York
More Asian governments are pressing businesses to hike wages as a way to prevent outbreaks of labor unrest, raising the specter of higher manufacturing costs for global companies—and the products they sell world-wide.
In the latest move, Malaysia's cabinet has approved the country's first-ever minimum wage to be imposed soon, according to people familiar with the matter. The decision follows similar moves elsewhere in the region, as officials from Thailand to Indonesia follow efforts by China over the past two years to boost pay after years of widening gaps between rich and poor.
Beijing raised its minimum monthly wage by 8.6% to 1,260 yuan ($199) starting in January, according to the state-run Xinhua news agency. The following month, the southern boomtown of Shenzhen raised its compulsory monthly wage by nearly 14% to 1,500 yuan. The northeastern port city of Tianjin will raise its minimum wage nearly 13% to 1,310 yuan starting in April, Xinhua said.
China's moves, in part, have helped spur other such changes in the region. Indonesian workers in some areas have secured minimum-wage increases of more than 20% in recent months.Thailand plans to introduce a higher minimum wage beginning in April that will push salaries up about 40% in many parts of the country. Labor advocates in Cambodia, Sri Lanka and Bangladesh also are calling for higher wages.
Low income wage earners in Asia are gaining bargaining power because labour capacity is becoming constrained across the region. Employers have little option but to accept wage increases because wage pressures are occurring throughout Asia and diminishing relocation as a feasible option.
Asian governments are heeding the call for higher salaries in order to diffuse rising labour unrest. Protests by low-income workers in China, Indonesia, Vietnam and Thailand are pressuring governments to act. The widening gap between rich and the poor is seen as a genuine problem in these countries, and the problem is seen to be exacerbated by stagnant and suppressed wages. Governments are standing behind the welfare of the people, with even Myanmar passing a new law that lets workers form unions and strike for more pay.
Meanwhile, in sunny Singapore, the government continues to outlaw labour assemblies and industrial action. Protests are antithetical to the harsh authoritarian regime. The dogmatic neoliberal ideology of the ruling party means that minimum wages are dismissed as being 'distortionary' to the economy, and 'welfare' is seen as a dirty, filthy word. Singaporeans are told that they need to accept the presence of 1000s of foreign workers in their country, because these foreigners 'create jobs' for Singaporeans.
Yet the stark reality remains that wages of the bottom 20% in Singapore have remained stagnant over the past decade, even as the cost of living has skyrocketed. The working poor are forced to accept their lot in society, and have become dependent on subsidies and handouts in order to obtain housing and to meet their daily subsistence needs. The government has only recently told businesses that they must buck up and improve their productivity, but the corporate lobby is up in arms over having to wean itself off the narcotic of cheap labour; and the deep entrenched position of vested corporate interests in Singapore means that there is going to be massive resistance to change.
While the working poor in Singapore might enjoy a higher absolute standard of living than the working poor in neighbouring countries, they have no rights, no voice and no dignity. They are trodden upon by the corporate class and the political elite, and are seen as mere pawns in the game of greater profits and higher gdp. Their wellbeing is but an afterthought in this elitist and plutocratic system, an inconvenience to be solved with patchwork and palliatives.
Developments around Asia make Singapore's policies look oppressive, misguided and anachronistic. Singaporeans would do well to sit up and take note, and reconsider their labour policy.