The ETP will be bad for wage-earners. Workers’ share of national income under the ETP will be just 21%, compared to 28% currently. Wage-earners’ losses will be corporate gains. The corporate share of ETP income will be 74%, up from 67% today. We fully support a vibrant corporate sector, but a healthy middle class is also crucial for sustainable high-income status. In developed economies, wages take about 50% of national income.
Income disparity will continue. The top 20% of households currently gobble up 49% of all household income. Under the ETP, the top 15% of wage-earners will tak 40% of all wages. The bottom 36% will have to make do with just 12% of total wages. It appears that KR1M thrift stores and Menu1Malaysia austerity meals will still be required in 2020 as the promised ‘high incomes’ benefit only a small minority.
The ETP will double our dependence on cheap foreign labour. If the ETP succeeds, there will be 16.2 million jobs and just 14 million workers to fill them. Who will fill the 2.2m million shortfall? The lower 1.2 million jobs the ETP creates will pay just RM1,100 in today’s terms. We would hope that Malaysians take the higher-paying jobs, which means that low-paid, poorly-skilled foreign workers will be required.
Continue reading “A Critique of the ETP: Part 6 – Socio-Economic Impact – The ETP will make the rich even richer”