Sin Chew Daily

The human resources ministry announced recently that the minimum monthly wage in 57 major cities and towns of the country will be increased from RM1,100 to RM1,200 with effect from January 1 next year, whole areas not in the list will maintain the minimum wage at RM1,100 a month.

Employers in general protest against this policy, calling it absurd. Many business operators will be caught unprepared while the market order will be further disrupted, with migrant workers being the only group of people benefiting from it.

Very few Malaysian workers or business owners will actually benefit from this policy, while business operators have too little time to brace for the change.

MEF executive director Shamsuddin Bardan says the federation will join hands with other organisations to seek a meeting with the prime minister through resources minister Kula in order to urge the government to review this decision.

Shamsuddin feels that the policy is not the same as what was announced during the tabling of the 2020 Budget, when the finance minister announced that the RM1,200 minimum wage scheme would only be implemented in 15 major cities.

SME Association of Malaysia president Michael Kang says the new measure will only aggravate the economic slowdown and encourage employers to retrench workers in order to cut cost. It will also have a negative bearing on the economic environment and affect the public’s confidence in the government.

Kang feels that the government should first consult the local business representatives before putting the new scheme into implementation.

Meanwhile, the SME Association will hold an emergency meeting to urge the government to withdraw the directive.

Federation of Malaysian Manufacturers president Soh Thian Lai says many employers find themselves unprepared for the rushed new policy. They also argue about the vagueness of the definition for “town”. Should places like Kemaman, Dungun, Taiping and Padawan be considered towns with the same standard of living as Kuala Lumpur?

The human resources ministry says the decision was made in the cabinet meeting on December 6 in line with the 2020 Budget. However, many business owners feel that this has been a decision rushed through without proper deliberation. Given the current sluggish market and economic outlook, the government’s unilateral decision to increase the minimum wage of urban workers to alleviate their financial pressure will only increase the burden of business owners.

The authorities should hold an in-depth dialogue with the operators in order to get a clearer picture of the existing situation to draw up a more effective policy.

Meanwhile, the government should also try to lower the cost of doing business by providing tax incentives to the business owners and encourage them to automate their operations and boost their competitiveness in a bid to offset the pressure from increased business cost as a result of higher minimum wage.

Additionally, the new salary scheme should also be accompanied by improved productivity. This is to prevent the business owners from transferring the additional cost to the consumers.