By Lee Wei Lian
KUALA LUMPUR, Oct 1 — Putrajaya is looking into why Malaysian companies are paying less than their Singapore counterparts as critical talent continues to flow across the causeway owing to the wage disparity.
The Secretary-General of the Ministry of Finance, Datuk Mohd Irwan Serigar Abdullah, said the government had discussed this morning the lower wages despite Malaysian companies making comparable or even higher profits to those in Singapore.
Irwan cited telecommunication companies (telcos) as among those that made more profit but paid its employees less.
“We need to discuss with telcos; you are earning profit, why are you paying less?” he said in his speech at a dialogue on the 2013 Budget.
Irwan said banks were equally guilty.
“Most of our accountants are moving from Malaysia to Singapore,” he said. Surgeons in the island republic, many of whom are Malaysian, were also paid more.
Stewart Forbes, executive director of the Malaysian International Chamber of Commerce and Industry (MICCI), said in the dialogue that the government needed to look into productivity in exploring wage disparity.
“If you are going to pay Singapore salaries, you need to push up productivity,” he said.
The gap between the earning power of Malaysians and Singaporeans has led to Malaysians being out-muscled for goods and services ranging from durians to property. Many durian harvesters prefer to sell to Singapore, where sellers pay more.
Part of the reason for the wage disparity is the widening chasm between the ringgit and the Singapore dollar. The ringgit, at par with the Singapore dollar in the 1970s and early ’80s, is now worth only about 40 Singapore cents.
The Straits Times in July cited how a 41-year-old service director who lives in Johor Baru but who works in Singapore had managed to earn an extra RM400 a month just from the recent appreciation of the dollar alone.
It said investors in Singapore could also be encouraged to give Malaysian property a closer look as they became cheaper and yields remained acceptable.
An increase in interest from Singaporean property investors, however, could put upward pressure on prices and potentially price more Malaysians out of the market.
The World Bank said last year that the number of skilled Malaysians living abroad has tripled in the past two decades, with two out of every 10 Malaysians with tertiary education opting to leave for either OECD (Organisation for Economic Cooperation and Development) countries or Singapore.
Figures from the World Bank report showed that 54 per cent of the brain drain from Malaysia was to Singapore, 15 per cent to Australia, 10 per cent to the US, and 5 per cent to the UK.