NEW MINIMUM WAGE
KUCHING: The government’s decision to raise the minimum monthly wage has received a positive response from employees while in contrast, employers claim the move will be burdensome on them.
Effective January 1, 2020, the minimum monthly wage will be raised to RM1,200 in major towns under 57 city and municipality councils, while the minimum wage will remain at RM1,100 per month for the rest of the nation.
Malaysia Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said that the new minimum monthly wage was unfair for most employers.
“The 2020 Budget had proposed RM1,200 for 15 major cities but barely two-and-a-half months later, the coverage was made to cover another 52 towns.
“The government only implemented the part of increasing minimum wage, but totally forgot its promise of subsiding employers amounting to 50 per cent of the increase,” he added.
He pointed out that most employers were currently facing various challenges especially when the economy was not doing that well.
“Major beneficiaries of the increase of minimum wages are foreign workers, who would send the additional RM100 back to their home countries and not spend it to boost the local economy.
“Employers dealing with the local market will likely have to pass on the increase in wages cost to consumers, thus resulting in higher cost of products and services,” he said.
He added that eventually, locals would not benefit from the increase in minimum monthly wages but instead would have to bear the higher cost of living.
Owner and managing director of Le Parlour Café Desmond Liew, 31, said that the new increment in wages may not be suitable in the long run and will result in further increments.
“It may improve workers’ quality of living slightly, but on the other hand, it will create a burden to current businesses especially micro enterprises in East Malaysia,” he told New Sarawak Tribune.
He explained that East Malaysia has a smaller population compared to Malaya, and the former also lacked direct flights — meaning its current business demands were mainly within the local population.
“Aside from that, as an employer, it will be fairer that a staff member’s wage, incentives and rewards be offered according to their capabilities and work commitments and not by a standard ‘minimum’ guideline that is revised ever so often,” Liew said.
He suggested that the government should provide skill-share classes or courses for staff who wished to seek higher wages for better living standards.
Brangka Munan, managing director of Mucow Malaysia Sdn Bhd, shared his view in terms of his agriculture business.
He said that it will be difficult for farm businesses, especially smaller ones, farming being in a lower returning industry to begin with.
“As most farming is still dependent on labour, this will be challenging. Many farming tasks are difficult to mechanise especially for smaller scale farmers,” he said, adding that this may result in smaller farms to close down.
“This will be devastating for agricultural industries that are just starting out in Malaysia such as fertigation, ruminants, and so on.”
He urged the government to look into wage subsidies for certain industries, particularly in food production, as the wage increase would put extra pressure on food producers already struggling to compete with cheaper imports.
A general manager from a local company who wished to remain anonymous opined that the raise would definitely benefit low income earners, but businesses with a large workforce may be unable to cope and thus have to resort to reducing their pool of staff or even shutting down.
Meanwhile, Malaysia Trades Union Congress (MTUC) Sarawak secretary Andrew Lo said that MTUC welcomed the move as the first of many increases as higher wages would spur greater productivity and encourage employers to invest in innovation and more efficient manpower.
Account executive Azfarina Masri, 28, said that the increased salary would help ease the burden of rising household costs.
“However, I think RM1,200 as minimum wage is still too low considering today’s cost of living.
“Some employers may misuse this minimum wage rule when it comes to offering a job to someone who is worth more than RM1,200 for his/her skills,” she remarked.
