KUCHING: The enforcement of a minimum wage of RM1,500 on employers with fewer than five employees starting July 1 will probably not have much impact on businesses in urban areas compared to those in rural areas.
Associated Chinese Chambers of Commerce and Industry Sarawak (ACCCIS) secretary-general Datuk Jonathan Chai however said it is time to face reality, knowing that it is unlikely the government will further defer the implementation of the minimum wage.
Generally, he said, most employers will have no problem in providing better pay for their employees if the business viability or profitability permits.
“But we must be realistic too as the enforcement of the minimum wage for businesses with less than five workers will dampen employment growth in the rural areas,” he said.
Speaking to New Sarawak Tribune, Chai said, for instance, it would be difficult to hire someone for RM1,500 in Klang Valley or Kuala Lumpur because of the high cost of living and labour shortages.
However, a lot of rural folk would be quite ready and prepared to take up a job for even less than RM1,500 in remote places like Kanowit or Marudi.
“Personally, I think the enforcement of the minimum wage should not be implemented across the board in a comprehensive manner,” he said.
“This is because the cost of living varies from place to place; different rates for different places and industries, which should be prescribed with due consideration of all regional factors, in particular, the cost of living, the demand of the local labour market and the extent of skills and knowledge required by the job,” he explained.
Chai said although the government is conscious of the need to revise the minimum wage to keep up with the rising cost of living, it is necessary to ensure the productivity of workers can keep up with the rising wages, failing which competitiveness will be adversely impacted and that will not do any good to the development of the economy.
“If you (government) insist on employers paying for their workers at RM1,500 per month, you might just kill off any potential employment opportunities in those areas which might otherwise have been made available,” he added.
Meanwhile, Sarawak Master Builders Federation President James Ha Tung Ing said the enforcement of the RM1,500 minimum wage starting this month does not really affect the construction industry as most of the construction companies have more than five employees.
“Besides, the majority of companies in the construction industry in Sarawak have been paying the workers more than RM1,500 from a long time ago,” he said.
“Even the skilled and unskilled workers at construction sites are earning far more than minimum wages,” he added.
