The earnings determination mechanism with respect to rubber tappers in Peninsular Malaysia in the pre and post-union eras
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Date
2006-06
Authors
S. Gopal, Parthiban
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
This study seeks to better understand the earnings determining mechanism of
rubber tappers in the pre and post-union eras in Peninsular Malaysia. It found
that in the pre-union era, the prevailing wage rate in the South Indian village
economy formed the basis for determining the payment to estate workers in
Malaya. The colonial authorities added a small premium to the village wage rate
to make emigration to Malaya attractive. How this premium was computed and
the actual wage rate paid to estate workers in Malaya prior to 1884 is unclear.
But from then on until 1910, Indian Immigration laws determined the minimum
rates payable, though the basis for the rates is not known. From 1910-1923,
there was no government control and wage determination remained the
prerogative of individual groups of planters. In 1923, a formal wage setting
machinery emerged with the Indian Immigration Committee being empowered
to fix standard wage rates in areas it thought fit. Composed of government
appointees and representatives of planters, the Agent of the Government of
India represented the sole voice of labour. Upward revisions of wages were
meagre and motivated solely by cost of living arguments-not the prosperity of
the rubber industry. Wage fixing was virtually abandoned in the 1930s and
tappers were at the mercy of their employers again. To keep the estate wage
rate low, the authorities increased the inflow of immigrant labour during periods of high labour demand in Malaya while in periods of low demand workers were
repatriated. In the post-union era, collective bargaining yielded creditable
improvements in earnings and fringe benefits to rubber tappers, despite the
relatively weak position of the Union and a restrictive bargaining environment.
Nonetheless, the earnings of rubber tappers are relatively low and remain
vulnerable to cost of living increases. Among the improvements suggested
are:{i) raising the fixed component of the wage system (provided a pre-agreed
task size is met) to protect workers against factors beyond their control; (ii)
restructuring the yield incentive such that it increases in a fixed relationship with
rubber price; (iii) introducing a bonus-style prosperity sharing mechanism to
give workers a fairer share; (iv) providing annual increments in the basic wage
rate to reward years of continuous (satisfactory) service so as to compensate
for the problem of declining earnings faced by aging workers; (v) providing
housing allowance for all members (instead of just one member) of a working
household without accommodation and (vi) making it a statutory requirement
for employers in industries with low earnings to make separate cost of living
payments when the rate of inflation exceeds a prescribed or pre-agreed
threshold.
Description
Keywords
The earnings of rubber tappers