Ever since prime minister Anwar Ibrahim announced the new minimum wage of RM1,700 during the tabling of Budget 2025 last week, there have been various responses towards it.
One of the responses came from SME Association of Malaysia, who claimed that implementing the new minimum wage would cause many businesses to collapse — one which was rebuffed by a Sarawak union, reported FMT.
S’wak union slams ‘fear mongering’ over new minimum wage
In a statement released by The Sarawak Bank Employees’ Union (SBEU), it said that it was disheartened to see certain groups resort to “fear mongering and incoherent rhetoric” by claiming that implementing the new minimum wage would spell the end of many businesses.
SBEU said that the assumption that the minimum wage would lead to an increase in the prices of goods was a “misconception”, adding that prices have been increasing before the current minimum wage of RM1,500 came into effect in May 2022.
We challenge struggling SMEs to disclose their full tax accounts to prove that the RM200 rise in operational costs – from a RM1,500 minimum wage to RM1,700 – could push them into insolvency.
“If it is indeed true, we will petition the government to reduce the minimum wage.
“Businesses that cannot even pay a minimum wage that is below the poverty line income (RM2,589) have no business to be in business. They should close shop,” the statement read.
What SME Association of Malaysia claimed
SBEU’s blistering response comes after SME Association of Malaysia’s president Chin Chee Seong said “fragile” businesses were still in the midst of recouping their losses due to the Covid-19 pandemic.
He also said that along with the increase in minimum wage and the proposed mandatory EPF contributions for foreign workers, it might cause many businesses to go bankrupt as they would be unable to absorb the rise in operational costs or pass them on to customers.
However, SBEU countered by pointing out that it was claimed in the past that the minimum wage will cause 300,000 businesses to fold, adding that it was “a blatant misrepresentation.”
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