SANDAKAN – Sabah employers have expressed concern over their businesses being pushed to the limits following the first month of the implementation of the increased minimum wage.
Sabah Employers’ Association president Yap Cheen Boon said the increase in minimum wage for workers in the state has exacerbated the already rising costs caused by supply chain disruptions, increasing raw material costs and rising interest rates to buffer the falling exchange rate.
The government rhetoric of inflation under control has seemed to fly in the face of actual experiences on the ground; with rising costs, businesses are forced to pass on price rises to consumers at an unabated rate,” he told The Vibes recently.
While the tourism sector, he said, is being pushed to the brink, other sectors such as manufacturing and services remain less optimistic on their prospects despite being buoyed by a spike in consumption over several months, which is believed to be primarily from people spending their EPF withdrawals and festivity expenditure.
“This sombre reality reflects severe miscalculations on the part of the government.
“To suddenly implement a minimum wage rise ranging between 25% to 36%, with the knowledge that this will induce a cascading flow-on effect on other wage levels, is more a populist measure than a sound economic move of introducing gradual adjustments instead,” he said.
To date, Yap said, Sabah’s economy still lags behind other states, reflected in the state’s unemployment figure of 9.1% (or almost 190,000 out of work Sabahans), which is the country’s highest.
“To stifle recovering businesses with the minimum wage on top of everything else is unfortunate, yet preventable,” he said.
He added that it is time that the Sabah government looks into providing assistance to struggling businesses and takes ownership of the state’s labour issues.
“Be more proactive in engaging with the state’s businesses, allow the state’s voices to be heard in the national wage committee instead of simply paying lip service for the past many years, allowing federal-centric considerations to trump (the) state’s circumstances.
“Continuing to blow the trumpet will not bring about an effective turnaround of the state’s economy within this year,” he said.
From the ground
The owner of a family-owned supermarket here, Chan, said that their initial plan to hire more staff was cancelled due to the minimum wage increase.
He said that the management has no choice but to increase the workload of each staff member as they could not afford to hire more workers without making a loss.
The management would also now close the supermarket earlier to avoid committing to overtime pay, and would consider closing on public holidays to avoid having to pay tripled wages to its staff.
“These are the only measures that we can take to cope with the increase of minimum wage,” he said.
As for minimum wage earners, a staff head in a restaurant here, Siti Miriam Mohamad, felt that it was somewhat unfair that it took her five years of hard work to get a salary increase from RM1,200 to RM1,500, yet a new hire would now earn the same wages as her.
She said she has more responsibilities as the staff head and that receiving the same salary as a newcomer who has fewer tasks is unfair.
But it is what the government has set, so there is nothing I can do about it,” she said.
There are also cases in which workers’ salaries are increased to RM1,500, but accompanied by a cut to their benefits, such as petrol allowances and medical coverage.
Such a case was reported by Singapore daily The Straits Times recently.
From the perspective of another minimum wage earner here, Yvonne Sofea Chong, who works as a waitress, she said she was happy to receive a RM300 increment to her previous RM1,200 salary.
The 22-year-old single woman said when she first applied for the job six months ago she knew that RM1,200 may not be sufficient for her to live comfortably, but she had no choice as there were limited job opportunities available in Sandakan.
She estimated that, based on the experiences of her colleagues, she would have to continue working in the same restaurant for at least four years before she could earn RM1,500, prior to the minimum wage hike.
“But I am lucky that the government announced the increment of the minimum wage. I am so happy that I finally have some extra money to give my mother,” she said. – The Vibes, June 8, 2022
