MIRI – Raising the minimum monthly salary by RM300 per month per employee by May 1 may cause more harm than good, seeing how suddenly the new policy is being implemented.
The policy change may give certain companies the excuse to resort to retrenchment exercises, said social activist and former Miri Mayor Datuk Lawrence Lai.
There is also the real danger of sudden surge in prices of foodstuffs, essential goods and services across the board that will severely hit the poor and self-employed including those with big families, he told The Vibes today.
“The prime minister announced this policy change of a big margin of minimum wage increase that will start on May 1 during the Umno gathering.
“It sounded very much like a populist decision aimed at their political preparation for the General Elections GE15.
“While it is good to increase the minimum pay of workers from RM1,200 to RM1,500 per month, it will cause more harm than good if the big increase is enforced so soon on May 1.
“There is a danger that companies and employers will use the sudden increase as an excuse to carry out retrenchment exercises.
“There will be those who will use that as an excuse to also hike the prices of goods, services, and food and drinks by a big margin.
“The impact could be very far-reaching,” he said.
Lai, who is a senior lawyer and former Miri Advocates Association chairman, said the sudden increase in wages will cause a sudden surge in cost of living across the board affecting even the poor.
He pointed out that manufacturing companies will have more overheads on worker salaries and will pass the costs to end users, where consumers will be the ones to pay the final price.
“If the prices of goods, essential daily necessities, food and drinks surge by a big margin, the ordinary rakyat will be the worst-affected,” he stressed.
Furthermore, he noted that there might also be a surge in prices of services across the board such as costs of transportation, housing, health care services and the like.
Lai said the government should carry out the increase of wages gradually, not by as much as RM300 per worker per month so suddenly starting this May.
“No doubt it is good that the government wants workers to get higher pay so that they can meet the rising cost of living.
“However, if the manner in which the increase is carried out causes retrenchment, higher costs of goods and services across the board, then the rakyat will end up suffering even more.
“It will do more harm than good. Increase the wages gradually over a bigger space of time,” he said.
The harm of a sudden high minimum wage increase will be long-term in nature to the people and cannot be reversed, he warned.
Datuk Seri Ismail Sabri Yaakob had announced the decision to push minimum pay from RM1,200 to RM1,500 per month during the recent Umno general assembly. – The Vibes, March 23, 2022
