Malaysia considers cost pressures in minimum wage review
- Champa Ha
Malaysia’s government must take a more holistic approach in the review of the minimum wage. It needs to consider the many cost increases that are taking place, with higher expenses for wages translating to higher costs of products and services.
To tackle this, Tan Sri Soh Thian Lai, President of the Federation of Malaysian Manufacturers (FMM), a private-sector economic organisation, said the government needs to engage with stakeholders to understand the current business sentiment.
“While there is a provision for the review of the wages order provided in the legislation, we urge the government to take cognisance of the many cost increases which the industry is facing this year and a more holistic approach in their review process of the minimum wages order including having proper and earnest engagement with stakeholders to understand the business sentiments and acceptable increase under the current circumstances,” he told New Straits Times’ Business Times.
The National Wages Consultative Council Act 2011 has a provision for the wages order to be reviewed at least once every two years, with the last review happening in May 2022. This review saw an increase in the minimum wages from RM1,100/RM1,200 (US$232.66/US$253.81) to RM1,500 (US$317.26).
The minimum wage policy was meant to counter the market forces in the rise of the cost of living, said Aimi Zulhazmi Abdul Rashid, Associate Professor, and economic analyst at the Universiti Kuala Lumpur Business School, noting that the rate of inflation should be the benchmark for comparison.
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Human Resources Minister Steven Sim said in Dewan Rakyat (lower house of the bicameral Parliament, the federal legislature of Malaysia) that the government will review the minimum wage this year per the National Wages Consultative Council Act 2011, taking into account the views of all stakeholders including employers and employees as well as socioeconomic reports.
