Unemployment has been an emerging and unsettled issue ever since the start of

industrialization or even earlier. Several factors were considered to have been the
reason why countries could not achieve full employment, thus causing other economic
problems such as poverty. Some of these causes would be the questionable
qualifications of the labor force and the continuous diverting of companies to being
capital intensive rather than labor intensive thus needing and employing the fittest few
among thousands who would want the position. However, these are just few dimensions
of the problem on employment. Government had implemented several policies just to
minimize or reduce the unemployment problems of the country. They have come up
with the minimum wage policy that set a price floor on the salary that employees must
receive as payment for their services so as to compensate the unemployment in the
family to sustain their cost of living. However, one big doubt among politicians,
economists and the labor force would be the efficiency of the minimum wage policy or is
politics to blame why minimum wage policy is not abolished.

The policy of Malaysia to abolish its minimum wage and have emerged during
the administration of their prime minister, Mahathir bin Mohamad. The primary objective
of the policy to abolish minimum wage is to give justice to employees, not just those
who are already employed but also to give opportunity to those who are seeking for
work. Full employment is one primary goal of the government and one way to reach
such is through abolishment of the minimum wage policy. Before we get into the
technical details why minimum wage does not do good in the employment status of the
country, let us first discuss why a policy to abolish minimum wage is needed in general
concept. First and foremost, minimum wage does not just get it right. If the government
would set a minimum wage too low then such would not make any sense to low wage
earners. On the other hand, if they would be increasing the minimum wage of the
country, it would result to a much worse scenario of huge unemployment. If the country
would just let market forces to set the wage of the employees then a huge increase in
the employment would happen. Let us take Singapore for example, according to their
prime minister, Mr. Lim, every one percent increase of the unemployment rate would
mean 20000 low wage earners getting kicked off from their job. Singapore does not
impose the minimum wage policy and they have proven themselves in terms of
employment, well in fact, in Singapore, they even have to import labor from outside of
the country just to supply the high demand of labor and we must take note that the pay
in Singapore is increasing even without the minimum wage policy. What happened in
Singapore is not magic, it’s very much possible. Investors have wanted to invest in
Singapore due to its cheap labor and then later on the employees and the businessmen
haggle on the wage prices which are the reason behind the increasing wage rate. Of
course the company would not want to agree on the employees request; if so then
nobody would work for them. This simply means that the government must not impose
any such intervention to solve the issue on unemployment. Economists have foreseen
the same for Malaysia especially now that it manifests a booming economy.
 The policy to abolish the minimum wage policy has caused some burden to the
employees on the first two to three years due to the low income that they have earned.
However, as the abolishment of the policy had been fully adopted, it had benefited a lot
of sectors of the country. Businessmen and investors have benefited in such a way that
they have a lower cost of production. The economy have benefited for it had reached
the goal of full employment. The abolishment also have benefited overseas workers
since they found themselves job on countries that demand work. Lastly, the labor force
have benefited since on the long run, they have got themselves a job with high returns.

However, the policy also has its flaw if there would be abusive employers that
would set wages at its lowest. Thus, Malaysia must impose another policy that would
protect the rights of the employees.

The policy to abolish the minimum wage policy for me is successful in Malaysia
and other countries that have implemented the same policy such as Singapore, since
based on the economic standing of these countries; they have proven to be booming
and effective in terms of solving employment issues. But how come politicians would not
like to implement such abolishment has something to do with politics. Presidents would
not want to abolish such policy because if they do so, in few days or less, they would be
impeached from their position. Also, it is one way for politicians to win elections, if they
would increase the minimum wage of the country, then a sure win would be guaranteed.
This is the reason why for example in the Philippines, minimum wages are increased
during the election fever.

The politics within the context of the policy to abolish minimum wage is intriguing.
First and foremost, on most cases, those countries that have abolished their minimum
wage policy were run by dictators that time. What does this mean? Well, the country’s
leader must have an absolute power over its constituents to implement such big issue
on employment. They must have the power that could be retained even if there were
rallies from labor union and such.

On the latter years, the adoption on the abolishment of the minimum wage policy
has been part of how Malaysia have ruled its constituents. They have pattered and
adopted the wage policy on the structures of their law to be implemented.

The authority of the said policy on its first years were on the rocks because of the
strong opposition of the labor force. However, after ten to 15 years, after the economy
has boomed and everyone gets employed, the society have recognized such policy that
they would not compel with the minimum wage law. In this case, the leaders were able
to repress the opposition because of the fact that they were dictators.

The policy to abolish the minimum wage has been questioned for its legitimacy
especially in terms of the rights of the employees. On the early stages they felt that the
law was not right and proper for them since they were compensated below the minimum
by their employers. But on the long run, we could see that the society have accepted
the policy to be right and proper on their part. The power is exercised fairly on this case
and it is clear that the interest and the sake of the people were the object why minimum
wage policy was abolished.

The nature of politics is indeed contrasting. Nothing works or do good for both
parties. In making policies, the other party would benefit on the expense of another.
However, in politics you have to weigh the consequences and think long run so as to
determine which policies or laws must be implemented. You are not in politics if you do
not have power, the power to govern and influence other people. In politics you must
also consider the legitimacy and your authority for policies would not work if you do not
have anyone to follow them. Lastly, in politics everything must be just and free from
biases. People’s way of thinking is very much sensitive in a way that a little flaw seen
from your actions would drive them to streets shouting for your impeachment.

References:

Abolish the minimum wage policy. Cambridge University Conservative Association.

Retrieved from http://www.cuca.org.uk/2009/04/02/abolish-the-minimum-wage/.
Retrieved January 11,2010.

Beng K. 2010. Minimum wage policy won't work: Employers, labour chief. Retrieved
from http://justice4workerssingapore.blogspot.com/2010/10/minimum-wage-policy-wont-
work-employers.html. Retrieved Januaray 11, 2010.