Manufacturing Wages Outperform National Average
Median wage data further supports the trend: while the overall formal sector median was RM3,045, manufacturing median wages ranged from RM2,764 to RM3,052 — all significantly above the national minimum wage of RM1,700. Malaysia’s unemployment rate remained low at 3.0% in April 2025, reinforcing the status of full employment.
In addition, DOSM’s Economic Census 2023: Employment and Salaries & Wages Statistics (released June 19, 2025) reported that the average monthly salary of Malaysian employees was RM3,332 in 2022, up from RM2,590 in 2015 — a compound annual growth rate of 3.7%. Within this report, the mining and quarrying sector recorded the highest wages (RM9,422), followed by manufacturing (RM3,513), services (RM3,493), and construction (RM2,536). These upward trends in all sectors further demonstrate the strength of wage growth in the Malaysian economy.
Wage Suppression Claims Debunked
FMM notes that these findings clearly show manufacturing wages are both competitive and steadily increasing. This counters any narrative that workers are being underpaid and confirms that the sector is committed to offering fair remuneration.
Labour Shortage Remains a Major Challenge
Despite this competitiveness, the sector continues to face critical labour shortages — particularly for 3D jobs (dirty, dangerous, and difficult). According to FMM, the hiring of foreign workers is driven by the scarcity of local workers willing to take up such roles, not by an intention to suppress wages. In fact, hiring foreign labour comes with added regulatory burdens and higher costs.
Even when employers offer wages above the national minimum, many positions remain unattractive to local jobseekers. While manufacturers are investing in automation and digitalisation to address this gap, these transitions require substantial time, financial investment, and skilled talent — all of which are in limited supply.
Support for Progressive Wage Policy (PWP)
In response to these challenges, FMM reaffirmed its support for a voluntary, productivity-linked Progressive Wage Policy (PWP). Such a policy would ensure that wage increases are aligned with measurable improvements in worker skills and performance, rather than mandated across-the-board hikes. FMM believes a business-friendly PWP grounded in clear metrics would garner industry support and ensure wage growth is sustainable.
Policy Recommendations to Tackle Workforce Gaps
To strengthen the workforce and address current challenges, FMM proposes the following policy measures:
- Expanding and enhancing TVET (Technical and Vocational Education and Training) programmes and industry-led training;
- Introducing targeted incentives for automation and support for job redesign initiatives;
- Formalising informal workers and tightening enforcement of wage regulations;
- Establishing tripartite labour planning councils to develop collaborative, data-driven workforce strategies.
Conclusion: A Call for Balanced Human Capital Strategy
The latest data confirms that manufacturing wages in Malaysia are rising steadily and surpassing national averages. The hiring of foreign workers is a necessary response to labour shortages — not a tool to suppress wages. FMM calls for urgent support to implement a balanced and skills-based human capital strategy, which is vital for ensuring the long-term competitiveness and inclusivity of Malaysia’s manufacturing sector.
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