EMPLOYERS are not enthusiastic about a possible upward revision of minimum wage, and instead urge Putrajaya to keep the rising cost of products and services in check.

Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman told The Malaysian Insight that employers cannot afford to increase wages, adding that controlling the rising cost of living is more ideal.

“MEF recommends that instead of an upward review of the current minimum wage, efforts should be put into place to control the rising cost of products and services.

“No amount of salary increase will be able to keep up with the ever-increasing cost of living if no effective measure is implemented to address and solve this issue.”

Syed Hussain said the grim economic scenario does not permit any upward revision of minimum wage as employers do not have the ability to absorb any increase in salary.

Such a review will disrupt efforts for economic recovery and may derail programmes outlined in the 12th Malaysia Plan, he added.

“Due to Covid-19, the Malaysian economy has contracted to -5% last year, as a result of a drop in performance across all economic sectors.

“More than 32,500 companies ceased operations and more than 107,000 employees lost their jobs last year.”

Syed Hussain said the weak economic scenario – a result of the various movement curbs and shutdowns implemented by the government to break the chain of Covid-19 infection last year and this year – brought about the high unemployment rate.

“Malaysia had been enjoying full employment, with an unemployment rate of below 4%, prior to the Covid-19 pandemic.

“The current unemployment rate among youth between the ages of 15 and 24 stands at 12%, and is very worrying.

“Due to employers’ cost-cutting measures, the median wage dropped to RM1,988 last year compared with RM2,442 in 2019, while the average wage dropped to RM2,062 last year compared with RM3,224 in 2019.

“Labour productivity recorded a negative value last year, with -16%, as a result of a reduced workforce and value-added gross domestic product.”

Syed Hussain said although the government has spent RM18 billion on wage subsidies – which benefited more than 300,000 employers and 2.4 million employees – many bosses continue to struggle to sustain.

He said private sector employers, especially in small, medium and micro enterprises, need more assistance from the government to retain existing employees.

This will allow them to assist the government to stabilise the labour market and create more quality employment in the longer run, he added.

Deputy Human Resources Minister Awang Hashim had recently said the National Wage Legislative Technical Committee is studying and refining all the findings obtained from the minimum wage review.

The study will then be presented and debated in the National Wage Consultative Council before it is submitted to the government for consideration and approval, he added.

As of September 1, the council has conducted six engagement sessions on the review with 209 employer associations, 93 trade unions and four non-governmental organisations. – October 23, 2021.