We’re a few months into Malaysia’s experiment with a minimum wage, and there’s we’re already seeing some effects, at least for the manufacturing sector:
The shaded areas cover November 2012 to the present. It appears wages actually started climbing before the minimum wage came into effect in January. Some of that is possibly the effect of year end bonuses or salary increments, but there’s no sign of a general pullback in January-February as has happened in the past three years. Note that even now, wages are just 5.6% of sales (up from an average of 4.8% in 2010-2012).
So it appears some of the big gap that has been thrown up between productivity and wages since 1998 is starting to close a little. It’s still too soon to tell, but at least things are moving in the right direction.
Data from the April 2013 report on Monthly Manufacturing Statistics from the Department of Statistics