Skip to main content


The common assumptions that increasing wages could lead to market distortion and reversely affect economic performance seem to be an “unspell curse” to the Malaysian economy. These assumptions are strongly held by the majority of employers as a result of the lack of evidence-based facts and scientific evaluation. This article provides exposure of the attainable benefits to employers, employees and the economy as a whole when wage rates are raised higher than the current level. This article also addresses the multidimensional wages by not only focusing on the average wages but also on minimum and living wages. At the end of this analysis, recommendations are provided on the approaches that can be used to increase wages without impacting economic competitiveness. This edition of Economic Outlook 2023 is meaningful and special for EU-ERA because it features the article “The Need for Escaping the Wage Curse” (pages 19-31), which was jointly written by EU-ERA and the Ministry of Finance.

Leave a Reply