The Small and Medium Enterprises Association (Samenta) has urged the government to prepare workers for higher-paying jobs through upskilling, rather than focus only on hiking minimum wages. Samenta president Dato William Ng said minimum wage changes should be done sparingly, with the aim to raise the income for the lowest-income earners. “When done without a corresponding increment in productivity or business margin, they will hurt the increment and promotion prospects of more productive workers. “This will also distort the labour market as businesses are forced to reduce jobs,” he said in a statement.
Citing Penang and Kulim in Kedah as examples, where over 50,000 vacancies persist, Ng claimed there is a persistent gap in the job market, especially in the technical and engineering sectors, despite competitive salaries ranging from RM3,500 to RM6,000. He said while the country’s median salaries increased by 73% from RM1,500 in 2010 to RM2,600 in 2023, factors like currency depreciation limited real wage growth. “Our proximity to Singapore and the weakening ringgit have resulted in many of our trained and highly skilled workers being poached by our neighbour. “RM1,500 would get you S$635 in 2010. By 2023, RM2,600 was only worth S$765, a mere 20% cumulative increment. In reality, the industry has steadily increased pay by a total of 73%,” he said.
Dato Ng said the rise of the gig economy in the post-pandemic era further undermined the effectiveness of the minimum wage system, with one out of four Malaysians now engaged in such work. “The government should instead focus on attracting high-value industries that offer high-paying jobs and ensure that Malaysians are trained and reskilled for these jobs,” he said. He said the proposed progressive wage model would also help align salary increments with productivity and skills, providing advantages for both businesses and employees.
On Monday, Human Resources Minister Steven Sim announced the government would review the minimum wage this year, in compliance with the National Wages Consultative Council Act 2011. His announcement followed the Malaysian Trades Union Congress’s call on Wednesday for the government to increase the minimum wage following the recent 2% rise in the service tax.
MTUC secretary-general Kamarul Baharin Mansor said it had been almost two years since the minimum wage was set at RM1,500 on May 1, 2022. He noted that the National Wages Consultative Council Act mandates that the council restudy the minimum wage order every two years.
FMT
