Malaysia's top union chief on Thursday called for a minimum wage of 1,200 ringgit (375 dollars) to help workers cope with soaring food and fuel prices.
Syed Shahir Syed Mohamud, president of the Malaysian Trade Union Congress, said millions of workers struggled on a monthly income of less than 700 ringgit.
"I cannot imagine how they survive with that meagre income and afford a decent life, especially for those living in industrial areas. This is the number one issue that workers are facing now," Syed told AFP after addressing a May Day rally in Selangor state.
Syed said employers' excuses that higher wages would increase operating costs and hit the competitiveness of Malaysian goods were outdated.
"Our workers should be trained and better their skills and taught to operate machinery. This will cut the country's dependence on cheap foreign labour," he said.
Prime Minister Abdullah Ahmad Badawi, in his May Day message, urged workers to be more innovative and creative to ensure the country remains competitive.
He said Malaysia could no longer rely on its cheap labour to attract investors and should focus instead on creating a higher quality and better educated workforce in the face of increasing regional competition.
"In the era of a knowledge-based economy, the ability to generate, spread and apply knowledge is crucial to determine the nation's productivity and competitiveness," he said in the statement.
"Malaysia can no longer depend on cheap labour costs. Skills and knowledge have become an important prerequisite in increasing one's wages in today's economy," he said.
The economy is going through a transition phase as it seeks to shift from a low-wage model to a high-wage, knowledge-based economy.
Malaysia is one of Asia's largest importers of cheap foreign labour and has about 2.3 million workers from Indonesia, Bangladesh, India and elsewhere to clean homes, construct buildings and gather crops.
The government has said it plans to cut its reliance on foreign labour to create more job opportunities for unemployed local people.
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