KUALA LUMPUR – The Malaysian Trades Union Congress (MTUC) has rubbished employers’ claims that increasing the minimum wage to RM1,500 will shut down businesses, saying facts and figures prove the contrary.
Its deputy president Mohd Effendy Abdul Ghani noted that since the implementation of minimum wages in 2013, statistics have shown that there have not been instances of companies shutting down for that very reason.
Instead, he argued that raising the salary of employees would bring more benefits to the economy as well as businesses in general, as consumers would have bigger purchasing power.
“Based on statistics, the number of small and medium enterprises has been increasing over the years. That’s a fact.
“There have not been reports about businesses shuttering because the minimum wage is raised,” he told The Vibes today.
"So, the excuse that MEF gave that they are concerned many companies will go under is not reasonable.
“We know from the start that increasing the minimum wage is good for the country and businesses.
“When workers have more salary to spend, this will give them more purchasing power and indirectly improve our economy,” he said.
Implement new proposed minimum wage as soon as possible
In a statement yesterday, MEF president Datuk Syed Hussain Syed Husman had said businesses would not be ready or in a position to pay higher wages to their workers, as many are still reeling from the economic shock of Covid-19 and the recent floods.
He said at present, the grim economic scenario means companies could not even afford any form of salary raise, and that an increase of RM300 to RM400 would be detrimental.
Hussain was responding to Human Resources Minister Datuk Seri M. Saravanan’s remark on Saturday saying the increase to around RM1,500 is expected to be implemented by year-end, pending approval from the cabinet.
Currently, the minimum wage is set at RM1,200 for 57 major cities and towns across Malaysia, while other locations are set at RM1,100.
Effendy said by right, based on the National Wages Consultative Council Act 2011, the Minimum Wages Order must be reviewed at least once every two years. The last order came into effect on Feb 1, 2020.
“I don’t know why MEF is objecting to the proposed increment, but from the point of view of employees, we insist the government enforce the new RM1,500 proposed minimum wage as soon as possible, perhaps by the second quarter.”
Employers should re-evaluate ‘perverse’ prioritisation of profit
MTUC’s immediate past president Datuk Abdul Halim Mansor said MEF’s objection is not something new, with the employers’ body having done the same every time a new minimum wage is proposed since the baseline salary was first implemented in January 2013.
Like Effendy, Halim noted that no businesses have been forced to shut down since the minimum wage was introduced then, and said MEF was only being selfish in its constant badgering for the government not to go ahead with its plan.
“Employers must take the responsibility to not only care for their profit, but to offer wages that are in line with the economy, and to give the people better purchasing power.
“This is the problem with our employers. They have a perverse concept of prioritising profit over their responsibility to the country and their staff.”
Halim also took issue with the proposed increment to RM1,500, saying this is well below the suggested minimum wage of RM1,800 by Bank Negara Malaysia in 2018, and nowhere close to a living wage.
"I strongly suggest the government and employers take the time to look at whether workers in the country truly have the financial capability of enjoying a comfortable life.
"At the moment, we can see that our people are more in debt than they have purchasing power, and this is because the minimum wage is not in accordance with the economic market.
“All of this boils down to politics. The government always seems to be prioritising employers over employees,” he said. – The Vibes, February 7, 2022
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