Rise in minimum wage could derail Malaysia’s economic recovery: MEF

A raise in the minimum wage could derail Malaysia’s economic recovery and the Twelfth Malaysia Plan (12MP), said the Malaysian Employers Federation (MEF).

“More than 32,500 companies had ceased operations with more than 107,000 employees losing their jobs following the lockdowns that were imposed by the government to break the chain of infections in 2020 and 2021,” said MEF President Datuk Dr Syed Hussain Syed Husman.

“This resulted in [a] higher unemployment rate which in August 2021 recorded four per cent,” he said in a statement today, reports Bernama. 

Median wages in the country fell to RM$1,988 (US$479) compared to RM$2,442 (US$588) in 2019, he said, while labour productivity also registered a fall of 16% in 2020, following a reduction in workforce numbers. 

Despite the various stimulus packages rolled out by the government, many businesses are facing severe challenges to keep afloat,  he noted. “Our top priority should be to provide more funding for businesses that were forced to shut down so that we are able to create employment for all those who lost their jobs during the lockdowns.”

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“To add to the cost of business now is unwise. It is more prudent to look into measures of controlling the cost of living which will directly help the wage earners. The most valuable asset of employers are their employees and no employer wants to see their employees face difficulties,” he added.