ECONOMIC DEMOCRACY AND WORKERS’ RIGHTS: FROM APPOINTMENT TO REPRESENTATION, FROM ECONOMIC GROWTH TO PEOPLE’S WEALTH MINIMUM WAGE, COST OF LIVING AND ECONOMIC JUSTICE: WHO IS BUDGET 2027 REALLY PROTECTING?

 PARTI RAKYAT MALAYSIA (PRM)

OFFICIAL PRESIDENTIAL MEDIA STATEMENT

12 October 2026

ECONOMIC DEMOCRACY AND WORKERS’ RIGHTS: FROM APPOINTMENT TO REPRESENTATION, FROM ECONOMIC GROWTH TO PEOPLE’S WEALTH

MINIMUM WAGE, COST OF LIVING AND ECONOMIC JUSTICE: WHO IS BUDGET 2027 REALLY PROTECTING?

By Ahmad Jufliz bin Faiza
President, Parti Rakyat Malaysia (PRM)

The people must be more than recipients of policy. They must have a voice, a dignified income and the opportunity to build wealth.

Parti Rakyat Malaysia (PRM) is concerned about the implications of Budget 2027, particularly the proposed minimum wage of RM2,000, its implementation timeline, the exemption for micro, small and medium enterprises (MSMEs), and the extent to which workers and contributors are represented in the institutions that shape the nation’s economic future.

A policy announced in the name of improving workers’ incomes must be assessed not only by the increase in the headline figure, but also by whether that income reflects the actual cost of living and whether workers have meaningful channels of representation and accountability.

This does not mean that every government measure lacks merit. The increase in the minimum wage from RM1,700 to RM2,000 represents an additional RM300, or approximately 17.6%. However, the increase alone does not prove that workers can now afford a decent standard of living.

In the Budget 2027 speech, the Prime Minister highlighted that Malaysia’s labour compensation share of Gross Domestic Product (GDP) remains low, at 33.9%, and that the gap between productivity and workers’ wages needs to be narrowed. The Government also announced a RM2,000 minimum wage from June 2027, an RM2,500 income framework for semi-skilled workers and graduates, and an increase in the living-wage benchmark for government-linked investment companies (GLICs) and government-linked companies (GLCs) from RM3,100 to RM3,400 per month. <Link url="https://www.pmo.gov.my/ms/ucapanterkini/ucapan-belanjawan-madani-kelima-tahun-2027-belanjawan-madani-kelima-menggapai-di-langit-mengakar-di-bumi/" title="(Official Budget 2027 speech, Prime Minister’s Office)."/>

The central questions are these: Is this framework sufficient to protect workers’ livelihoods, and do the people have an appropriate say in how national wealth is generated, governed and distributed?

For PRM, these questions are inseparable from economic democracy.

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1. RM2,000 minimum wage: An increase must be measured against real living costs

PRM acknowledges the announced increase in the minimum wage to RM2,000 per month, scheduled to take effect in June 2027. While this increase merits consideration as a policy change, the waiting period raises concerns about the burden that workers will continue to bear in the intervening months.

Food, housing, transport, utilities and family necessities do not wait until the new wage takes effect.

The Government should therefore explain the basis for setting the rate at RM2,000, the cost-of-living data used, and the reasons for the transition period. Low-income workers should not be expected to bear the entire cost of waiting for the policy to take effect.

PRM also stresses that the minimum wage is a floor of income protection, not a guarantee that a worker earns enough to live with dignity.

What do Bank Negara Malaysia and EPF tell us?

Bank Negara Malaysia published The Living Wage: Beyond Making Ends Meet in 2018, examining the income required to achieve an acceptable minimum standard of living. Its estimate for a single adult in Kuala Lumpur at that time was approximately RM2,700 per month, based on the expenditure basket and price levels used in the study. <Link url="https://www.bnm.gov.my/insights/income/ar2017b3" title="(Bank Negara Malaysia, living-wage study)."/>

Meanwhile, the Employees Provident Fund’s (EPF/KWSP) Belanjawanku 2024/2025 guide estimates monthly expenditure needs in the Klang Valley for different household categories, including:

- Single adult using public transport: RM1,970;
- Single adult owning a car: RM2,800;
- Couple without children: RM4,970;
- Couple with one child: RM6,420; and
- Couple with two children: RM7,440.

These are estimated household expenditure requirements based on particular assumptions, not statutory minimum-wage rates prescribed by EPF. <Link url="https://www.kwsp.gov.my/ms/w/epf-releases-belanjawanku-2024/2025-and-retirement-income-adequacy-framework" title="(EPF, Belanjawanku 2024/2025)."/>

PRM does not equate Bank Negara’s living-wage benchmark with EPF’s household expenditure guide, nor does it claim that either institution has prescribed a particular statutory minimum wage. However, both provide useful evidence for assessing whether workers’ incomes reflect the realities of daily life.

If minimum wages are set without regular assessments of living costs, they risk falling behind the conditions workers actually face.

PRM calls on the Government to publish the basis for calculating the minimum wage, establish regular reviews and explain how productivity, inflation, household needs and employers’ capacity are taken into account.

2. MSME exemptions: Revenue is not the same as profit

Budget 2027 provides an exemption for MSMEs with annual sales below RM50 million to allow time for business-model adjustments to the new minimum wage. PRM recognises that businesses have different financial capacities and that a small employer may not have the same resources as a large corporation.

However, annual sales do not necessarily reflect net profit or the actual ability to pay higher wages.

A business with substantial sales may also face high costs for raw materials, rent, financing, logistics, utilities and labour. Its net profit margin may be narrow. Conversely, a business with lower sales may enjoy a relatively high profit margin.

The RM50 million threshold should therefore be examined carefully. The Government should explain why this threshold was chosen and whether it accurately identifies businesses that genuinely need additional time to adjust.

PRM proposes that the assessment also consider factors such as net profit and profit margins, cash flow, number of employees, operating costs and the actual financial capacity of each business. Any mechanism must include safeguards against accounting manipulation and must not create opportunities to evade legally required wages.

PRM does not want workers to be pitted against MSMEs. Small businesses that genuinely need assistance should receive targeted support through digitalisation, productivity improvements, skills training and appropriate financing.

At the same time, exemptions must not become a justification for keeping workers’ wages inadequate without assessing the employer’s actual ability to pay.

A fair policy must protect workers without undermining viable businesses, and support businesses without making workers bear the entire cost of adjustment.

3. From appointment to representation: Lessons from Thailand

Workers’ incomes must be considered alongside the question of who represents them in institutions responsible for social protection and their financial future.

On 11 October 2026, Thailand held elections for employer and insured-person representatives to its Social Security Board. This provides a regional example worth examining: people who participate directly in a social security system have a channel through which they can choose representatives to the governing board. <Link url="https://www.thaigov.go.th/th/news/170044" title="(Thai Government, Social Security Board election report)."/>

PRM is not proposing that Malaysia copy Thailand’s system automatically. Each country has a different legal framework, institutional history and governance requirements.

Nevertheless, the Thai experience raises a legitimate policy question: if workers and contributors help finance a social protection system, to what extent can they determine who represents their interests?

Representation is not merely about filling seats on a board. It concerns the selection process, the mandate of representatives, transparency, freedom to raise concerns and accountability to the people they represent.

Malaysia should examine whether open nominations, consultation with trade unions, elections by represented groups or other appropriate mechanisms could strengthen institutional legitimacy and accountability.

4. SOCSO and EPF: Representation must carry workers’ voices

PRM recognises that the Social Security Organisation (SOCSO/PERKESO) and the Employees Provident Fund (EPF/KWSP) already have board structures that include government, employer and worker or contributor representation under their respective legal frameworks.

The issue is therefore not that worker representation is entirely absent. The key question is whether the methods of appointment or selection, the mandate of representatives and existing accountability mechanisms are sufficiently transparent and provide workers and contributors with meaningful participation.

For SOCSO, the Government should examine how insured persons’ views can be conveyed more directly and effectively in decision-making.

For EPF, workers’ retirement savings require strong, professional and accountable governance. Worker representation must be considered alongside contributors’ long-term interests, fiduciary responsibilities, the security of savings and prudent investment management.

PRM proposes a review of:

1. The criteria and nomination process for worker and contributor representatives;
2. Transparency in appointments and the justification for selection;
3. Consultation mechanisms involving trade unions and contributor groups;
4. Reporting on representatives’ responsibilities, subject to applicable law and legitimate confidentiality requirements; and
5. The feasibility of expanding direct participation through mechanisms consistent with the law and each institution’s mandate.

The objective is not to replace expertise with political interests. It is to ensure that expertise operates alongside accountability and the voices of those whom these institutions serve.

5. Trade union rights are part of economic democracy

Trade unions are essential channels through which workers organise, bargain collectively and defend their rights.

Issues involving the Malaysian Trades Union Congress (MTUC) and the National Union of Bank Employees (NUBE) remind us that workers’ rights are not determined by minimum-wage rates alone. They also depend on freedom of association, fair negotiation and access to legal remedies.

In the MTUC matter, the High Court suspended the Registrar of Societies’ dissolution order in August 2026 while judicial review proceedings continued. This development must be understood in the context of the relevant proceedings and court orders. It also highlights the importance of fair process for institutions representing workers.

In disputes involving NUBE and employers, individual claims must be assessed on their facts and through the relevant legal processes. PRM urges all parties to respect collective bargaining and established dispute-resolution mechanisms.

The Government, employers and trade unions need effective channels for dialogue. Workers must not be treated merely as operating costs, and trade unions should not be excluded from policy discussions that directly affect workers’ income and job security.

6. From income protection to a National Wealth Architecture for Malaysia

PRM believes that wage and worker-representation issues must be connected to a broader question: how can the people build wealth instead of merely covering their monthly expenses?

Workers may have jobs but remain unable to accumulate savings. Contributors may have retirement accounts but face uncertainty about whether their savings will be sufficient. Small businesses may create economic value without receiving a proportionate share of the returns.

To address these challenges, PRM proposes the National Wealth Architecture for Malaysia (Senibina Kekayaan Negara Malaysia) as a framework for policy discussion.

It views national wealth through the interaction of five dimensions:

- Human wealth — people’s skills, knowledge, health, creativity and capabilities;
- Natural wealth — land, water, natural resources and ecosystems;
- Produced wealth — agriculture, industry, services, technology and enterprise;
- Financial wealth — savings, credit, investment and financial institutions; and
- People’s wealth — assets, productive ownership, financial security and opportunities to build wealth across generations.

These dimensions depend on one another. Natural wealth requires skilled people to develop it productively. Productive activity requires suitable financing. Financial wealth should support beneficial economic activity, while the returns should create opportunities for broader ownership and improved public well-being.

The objective is to move beyond an approach centred solely on assistance towards an economy that enables people to produce, own and grow wealth.

Social assistance remains essential for those who need protection. But social protection must operate alongside decent employment, adequate income, asset ownership and participation in productive economic activity.

This is what people’s wealth means: not merely public money spent on the people, but the capacity of the people to build wealth and participate fairly in the value generated by the nation.

7. Digital transformation: Who owns the value created?

Digital technology and artificial intelligence (AI) add another dimension to economic democracy.

When technology increases productivity, we must ask who owns the data, who controls the infrastructure, who captures the profits and how the benefits are shared with workers and society.

Digital transformation should not merely improve operational efficiency or concentrate ownership in a small number of hands. Workers and MSMEs need access to relevant skills, technology, financing and opportunities to participate in the emerging economy.

The Government should also assess whether productivity gains translate into better wages, quality employment, stronger local enterprises and broader economic ownership.

For PRM, technology should strengthen human capabilities and national economic sovereignty, not create new divisions between those who own the technology and those who provide the labour.

8. PRM’s proposed policy actions

PRM calls on the Government to consider the following measures:

First: Evidence-based minimum-wage reviews. Publish the basis for the RM2,000 rate, assess the impact of the transition period and establish regular reviews based on living costs, productivity and employers’ capacity.

Second: Review MSME exemptions. Explain the rationale for the RM50 million annual-sales threshold and consider profit, margins, cash flow and actual business capacity, with safeguards against abuse.

Third: Targeted support for businesses. Strengthen productivity, training, digitalisation and financing support so viable businesses can adjust without transferring the entire burden to workers.

Fourth: Review worker representation. Examine appointment and nomination mechanisms in SOCSO, EPF and related institutions. Study elections or other appropriate participation mechanisms while preserving legal requirements, professional competence and fiduciary responsibilities.

Fifth: Protect trade union rights. Strengthen tripartite dialogue, freedom of association, collective bargaining and access to fair dispute-resolution processes.

Sixth: Build people’s wealth. Connect wages, savings, credit, investment, skills and asset ownership within an integrated economic framework.

Seventh: Measure outcomes transparently. Assess policy success through changes in workers’ purchasing power, job quality, MSME viability, retirement security and opportunities for people to build wealth—not merely through allocations or announcements.

9. People’s Economic Discourse: Evidence over slogans

These issues are directly relevant to PRM’s Wacana Ekonomi Rakyat (WER) 2026, scheduled for 24 October 2026, under the theme:

“Money • Credit • Debt • Prices • Justice”

WER provides a platform to examine how money, debt, prices, income and ownership structures affect the lives of Malaysians.

PRM intends to direct these discussions towards practical outcomes through an issues matrix, a policy brief and a people-centred economic dashboard. The objective is not to deny differences in opinion, but to test proposals against evidence, identify areas of agreement and develop solutions that can be evaluated.

Our guiding principle remains:

Evidence over slogans.

10. The fundamental question: Who actually benefits from national wealth?

A large budget does not automatically guarantee a better life for every citizen. A wage increase does not necessarily resolve the cost-of-living crisis. Business exemptions do not necessarily help those most in need if the criteria fail to reflect actual financial capacity.

Likewise, representation on a board is insufficient if the people represented lack transparent and accountable channels through which their voices can be heard.

PRM calls on the Government to evaluate economic policies not only by their stated intentions and financial allocations, but also by their actual effects on people’s lives.

Workers need adequate wages. MSMEs need room to grow. Contributors need responsible governance. Trade unions need the space to represent their members. The people need opportunities to own assets, build enterprises and participate in the wealth generated by the nation.

This is the essence of economic democracy that PRM seeks to advance.

From appointment to representation. From economic growth to people’s wealth. From minimum wages to a dignified life. From participation to ownership.

The national question is not merely how much wealth Malaysia can generate, but how far that wealth strengthens the lives, dignity, security and future of its people.

AHMAD JUFLIZ BIN FAIZA
President
PARTI RAKYAT MALAYSIA (PRM)

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Key references

1. Prime Minister’s Office, Budget 2027 Speech — minimum wage of RM2,000, implementation from June 2027, MSME exemptions, the RM2,500 income framework for semi-skilled workers and graduates, and the RM3,400 GLIC/GLC living-wage benchmark: <Link url="https://www.pmo.gov.my/ms/ucapanterkini/ucapan-belanjawan-madani-kelima-tahun-2027-belanjawan-madani-kelima-menggapai-di-langit-mengakar-di-bumi/" title="Read the official speech"/>.
2. Bank Negara Malaysia, The Living Wage: Beyond Making Ends Meet: <Link url="https://www.bnm.gov.my/insights/income/ar2017b3" title="Read the Bank Negara study"/>.
3. EPF, Belanjawanku 2024/2025 and Retirement Income Adequacy Framework: <Link url="https://www.kwsp.gov.my/ms/w/epf-releases-belanjawanku-2024/2025-and-retirement-income-adequacy-framework" title="Read the EPF publication"/>.
4. Thai Government, report on the election of employer and insured-person representatives to the Social Security Board, 11 October 2026: <Link url="https://www.thaigov.go.th/th/news/170044" title="Read the Thai Government report"/>.
5. SOCSO, board members: <Link url="https://perkeso.gov.my/en/board-members/" title="View SOCSO board information"/>.
6. EPF, Employees Provident Fund Act 1991: <Link url="https://www.kwsp.gov.my/en/others/resource-centre/references/epf-act-1991" title="Refer to the EPF Act"/>.

Note: Bank Negara’s living-wage estimate and EPF’s expenditure guide have different purposes and assumptions from the statutory minimum wage. They are cited here as evidence for assessing income adequacy, not as a claim that either institution has prescribed the same statutory minimum-wage rate.