Article: MEF shocked by Rafizi's remarks
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MEF shocked at Rafizi’s progressive wage remarks
13 July 2023
A revealing debate as to who is actually in charge of wage increases – is it the Economy Ministry or the Human Resources Ministry?
The Malaysian Employers Federation says it’s the Human Resources Ministry whereas the Economy Minister in a refreshing change of common wisdom says it’s his Ministry – The Economy Ministry.
Movement for Monetary Justice Malaysia sides with the Economy Minister. It is his Ministry or to be more precise it is the combined responsibility of the Finance Ministry and the Economy Ministry. For it is actually these two Ministries who have the combined ability to improve the wages of the people of a nation. We had hoped the Economists the government trusts so much, to reveal the problem and outline the solution but that does not seem forthcoming.
The Nation should now realise it is the banking industry which is actually depressing the nation’s wages by creating a permanent employers’ market for the nation. Where money goes is key to the fate of a nation.
Whether the nation, especially its decision makers have realized or not, 95% of the nation’s money is created by banks. In other words, numbers money that is created by banks when they give out loans as confirmed by the Bank of England and the European Central Bank.
Secondly, where money is directed is key to the progress and survival of the nation. Whoever is appointed money creator for the nation must have the wherewithal to realize the crucialness of pointing the money to the real sector. This will create/increase economic output and employment for the benefit of the nation!
However, when banks as money creators are allowed by the Central bank to have a free hand to allocate 65% of the nation’s money to personal loans, credit cards and generally the personal sector, too little is directed to the sector that creates employment!
And more so, of the 35% that goes to companies and the real sector only 16% goes to the SME sector. SME sector creates 70% of the nation’s jobs! Banks, by diverting only 16% of the nation’s money to the SME sector, thus deliver an employers’ market depressing the starting and general salaries of the nation. Too many people seeking jobs compared to the number of jobs available or created by the employers.
Thus, to improve the people’s wages and salaries, the de factor employer’s market currently persisting in the nation, must be reversed and neutralized. One does this by ensuring more money goes to the real sector and especially the SME sector, defined as companies with turnover of RM50 million and less, so that more jobs can be created.
And this is clearly in the realms of the Economy and Finance Ministries, and not the Human Resources Ministry!
Movement for Monetary Justice, Malaysia sides with the Economy Minister in this issue. We also, however, sympathize with the Employers sector. What we wish to drive the Nation’s attention to at the moment is the lack of the banking industry’s gratitude, and subsequently their ill-fated mis-chosen focus of business to mainly the personal loans and personal sector when blessed with the gift of money creation by the Nation.
Currently the banking industry’s ratio between loans/financing to personal sector and loans/financing to real sector is 65%:35%. It is about time the government insists this ratio be reversed to 65% in the real sector and 35% in the personal sector!
And we call on all institutions to redirect loyalty to the nation first, under all and any circumstance.
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Dikemaskini [Updated]: Sam Ahmad 20230627