Most Malaysian MSMEs unable to afford minimum wage

Most businesses are not ready to increase the minimum wage as they still have not recovered from the economic impact of the pandemic.
By: | January 11, 2022

Instead, authorities should make more efforts towards controlling the rising cost of products and services, said Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman.

“We must remember that most Malaysian businesses are micro, small and medium enterprises (MSME), 95% are in this group. So, when we talk about wages and cost, we must think of them.

“The big corporation can afford to offer any salary they want. MSMEs are suffering and, with a small increase in their cost, they will suffer and close down,” he said, alluding to a large company which recently raised its minimum wage to RM1,400 (US$332) which is higher than the existing national minimum wage of RM1,200 (U$285) per month.

“Many employers continue to face severe challenges to remain sustainable. The grim economic scenario does not allow any space for an increase in existing minimum wages. It is important that decision-makers keep this in mind before implementing cost-increase policies,” he added.

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Syed Hussain said the crux of the matter is not one of minimum wages, but one of managing costs. With inflation and higher cost, any amount of wage increase will not improve the livelihood.

As such, he has proposed the establishment of a National Cost Monitoring Council to study increases in prices of all goods and services, according to The Malaysian Reserve.