MIRI – The proposed increase in minimum wage to RM1,500 should apply to mega companies with a sizeable profit margin while RM1,200 quantum is maintained for small businesses.
Lawyer and Sarawak PKR information chief Abun Sui told The Vibes today that the increase in minimum wage should be considered on a selective basis.
“Sarawak has many giant consortiums and companies involved in mega projects that earn immense revenues every month. They can afford it and must implement the RM1,500 minimum wage if approved by the federal government later this year.
“They have tens of thousands of employees across Sarawak. These employees will surely benefit from the pay hike. For small companies with low profit margins, the minimum pay should be maintained at RM1,200 per month.”
He said the state and federal governments should hold dialogues with business players on the matter.
Recently, the Sarawak Oil Palm Plantation Owners Association rejected the proposal by the Human Resources Ministry to increase the minimum wage to RM1,500.
In a statement, its president Felix Mo said that the association’s members lack the financial resources to implement a salary hike, stemming from the economic downturn as a result of the Covid-19 health crisis.
“Due to the past two years of difficulties suffered by the palm oil business during the Covid-19 crisis, many plantations are still in the process of recovering from their losses. They are not able to spend more.
“Furthermore, the operation costs in this industry have shot up, especially with the increase in costs of raw materials. The prices of fertilisers and pesticides have gone up by big margins already.”
The Sarawak Timber Association also joined those in the business and industrial sectors opposing the ministry’s plan.
“Small and medium scale entrepreneurs will be further affected. There will be a domino effect where these operators will have much more financial burdens to deal with. Most are still trying to recover from the impact of the pandemic over the past two years,” the association said in a statement.
On February 7, the Sarawak Housing and Real Estate Developers’ Association (Sheda) warned about the potential rise in prices for essential items if the minimum wage proposal is implemented.
Sheda president Augustine Wong said in a statement that the increase in wages and salaries may see more negative consequences than positive ones, such as the soaring prices of goods.
“This is based on our past experience where salary increases would see prices of food and essential items increase. The ministry said the plan to increase minimum pay is to increase the spending power of the people to boost the economy.
“But the reality is that the increase may have the opposite impact.
“Aside from a hike in prices, there could also be a reduction in jobs if employers have to pay their workers more,” he noted, adding that instead of raising wages and salaries, the government should focus on productivity to boost the economy. – The Vibes, February 17, 2022
