While workers may welcome the idea of a higher minimum wage, employers are warning that a sharp increase could come with consequences for businesses and the job market.
This comes after a proposal was made to raise Malaysia’s minimum wage from RM1,700 to RM3,100.
According to Utusan Malaysia, Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said the proposed increase would amount to a jump of about 82%, which he argued would significantly change businesses’ labour cost structures.
‘Not a small adjustment’
Syed Hussain said RM3,100 should not be made a mandatory minimum wage figure without first conducting a comprehensive assessment of Malaysia’s current economic and labour market conditions.
He also stressed that minimum wage and living wage are two different concepts.
Minimum wage is a statutory wage floor, while a living wage is a broader concept that takes into account the needs of an individual or household. The two cannot necessarily be treated as the same,” he was quoted as saying.
He added that the focus should not simply be on setting a higher minimum wage, but ensuring that any increase is sustainable without negatively affecting job opportunities or business competitiveness.
MTUC suggested RM3,100 as reference
The Malaysian Trades Union Congress (MTUC) had reportedly proposed that a living wage of RM3,100 per month be used as a reference when determining Malaysia’s next minimum wage rate.
MTUC secretary-general Kamarul Baharin Mansor said the figure was reasonable given current living conditions, including rising costs of food, housing, transportation and other basic necessities, as well as inflation.
However, Syed Hussain said any proposal to revise the minimum wage should be referred to the National Wages Consultative Council (MPGN), which is responsible for reviewing the rate at least once every two years.
The council includes researchers as well as representatives from trade unions, employers, industries and the Human Resources Ministry.
“We cannot use a one-size-fits-all approach,” he said.
Businesses may cut hiring or raise prices
Syed Hussain said an 82% increase in basic salary would also lead to higher statutory contributions, overtime payments, employment benefits and other labour-related costs.
He warned that businesses operating on thin margins could respond by reducing hiring, raising prices, accelerating automation or scaling down their operations.
At the same time, he said experienced and highly skilled workers should not remain on minimum wage if their skills, productivity and value to a company have increased.
Instead, he called for clearer wage progression based on workers’ skills, productivity and responsibilities.
“Higher wages must come together with higher productivity so that the increase can be sustained by employers and enjoyed by workers in the long term,” he said.
READ ALSO:
