EMPLOYERS are against any move to again raise the minimum wage, saying the government should focus on reviving the sluggish economy instead of creating more problems for them as they struggle to survive.

The minimum wage was raised in May last year to RM1,500 from RM1,200.

SME Association of Malaysia president Ding Hong Sing said government should help small- and medium-size enterprises to overcome challenges such as access to credit, work process inefficiency and adoption of new production technologies.

“It is not a bad idea to raise the minimum wage but not now. Maybe in three or five years’, when the SMEs are on better footing,” Ding told The Malaysian Insight.

SMEs account for 97% of businesses in Malaysia, according to the Statistics Department.

Sabah Universiti Teknologi Mara political economy senior lecturer associate professor Firdausi Suffian recently suggested the minimum wage should be increased “to balance the people’s income with the current high cost of living” and to boost economic activity.

Ding said a higher minimum wage will spook investors.

“They will not come here. They will just go to Indonesia, Vietnam or other Asean countries,” he added.

Ding said the rate was already raised last year to compensate for inflation.

“Well, the inflation still persists. Do you think that if the minimum wage is raised again, the inflation problem will be solved?”

Master Builders Association Malaysia president Oliver Wee Hiang Chyn said there are many factors to be considered before making an adjustment.

Many construction companies have not fully recovered from the impact of the Covid-19 pandemic, he said.

Fluctuating raw material prices, labour shortages and contract disputes still beset the industry, he added.

“We cannot eliminate poverty overnight. Yes, inflation is putting pressure on people’s lives and actions should be taken to reduce the burden, but that takes time,” said Wee..

“To continue raising the minimum wage is not the best long-term solution to deal with inflation because it will directly affect the cost of doing business.”

Ripple effect

Restaurant and Bistro Owners Association vice-president Jeremy Lim said higher minimum wages will have a ripple effect.

“If, for example, the government raises the minimum wage by 20% this time, how will industries that do not register a 20% profit deal with that to stay even?”

“We will pass the increased costs to the customers.”

Lim said most restaurateurs already pay their workers more than RM1,500 a month.

He said he had been doing that since 2019.

“It’s not possible to hire good people otherwise.”

Prime Minister Anwar Ibrahim has said that the cabinet will meet next month to discuss a proposal for a new minimum wage. – May 13, 2023.