Minimum wage: subsidies better option than deferment to help SMEs, says ex-human resources minister

KUALA LUMPUR – The implementation of the new national minimum wage should be done across the board without exceptions.

Former Human Resources minister M. Kulasegaran said while increasing the minimum wage is a welcomed move, the decision to defer the implementation upon small and medium enterprises (SMEs) should be reconsidered.

Instead, Kulasegaran proposes that the federal government allocate subsidies for SMEs that may not be able to cope with the costs resulting from the increase of the national minimum wage from RM1,200 to RM1,500.

“It is more feasible for the government to give subsidies to SMEs to make this work.

“If the national wage is to be increased to RM1,500, it must be across the board.

“Those that are not able to cope can be given a subsidy within a certain time frame to handle the situation,” Kulasegaran told The Vibes.

Yesterday at the Umno General Assembly, Prime Minister Datuk Seri Ismail Sabri Yaakob announced an increase in the national minimum wage of RM1,500 that will be enforced beginning May 1.

However, the increase in the national minimum wage will not apply across the board as it will only apply to companies with five employees or more. 

Additionally, Ismail Sabri also mentioned the possibility of deferring the implementation of the new minimum wage on SMEs that are unable to afford it. 

Kulasegaran also took the opportunity to slam the federal government for failing to gradually increase the national minimum wage.

The Ipoh Barat MP pointed out that it was the Pakatan Harapan administration that increased the minimum wage to RM1,200 in 2020, and there were no follow-ups by the Perikatan Nasional and Barisan Nasional administrations until now.

Kulasegaran emphasised the importance of ensuring the minimum wage continues to increase, pointing towards the lack of bargaining power among employees and skyrocketing prices of goods.

“I have come across employees who have been working for one or two decades and yet they still earn a minimum wage because they aren’t in a position to bargain,” Kulasegaran added.

Further, besides increasing the national minimum wage, Kulasegaran also highlights the importance of ensuring a skilled workforce.

He urged Putrajaya to ensure a system where workers from the B40 group are encouraged to enhance their capabilities by partaking in skills training.

“Unless this is done, workers will be stuck in a vicious trap expecting minimum wage to go up,” Kulasegaran said. – The Vibes, March 20, 2022