THE standardisation of minimum wage between the peninsula and Sabah and Sarawak to RM1,050 from January 1 next year has brought about some sort of relief to Sabah workers, but many express hope the same could be done with the cost of goods in the state.

For coffee-shop worker Ainah Adul, although the increase in the minimum wage will give her an additional RM130 a month, it is still insufficient, as her monthly groceries cost around RM320.

The rest goes to her two children’s schooling needs, like transport (RM300 a month) and utility bills (RM200), said the 40-year-old single mother.

“Things get really hard if any of us fall sick, or one of them (the children) is having a birthday. So I must never, never get sick,” she said.

Concerns that the raise will not have much of an impact were also raised by Sabah part-time workers and freelancers.

For part-timers, many fear their employers will slash their working hours while the freelancers feel fewer jobs will go around as firms maintain a tight budget when the new minimum wage kicks in early next year.

Timothy Dingon, 21, who works part time at a fine-dining restaurant in Kota Kinabalu, said his senior colleagues told him such things happened during the last minimum wage revision on July 1, 2016.

“It will not affect me much as I can still be a Grab driver. But, of course, having a part-time job would be better than to waste fuel and spend much of my Grab income on car maintenance,” said the final-year private college student.

Putrajaya earlier this week announced raising the minimum wage in Sabah and Sarawak from RM920 to RM1,050 to be on a par with the minimum wage in Peninsular Malaysia. In the peninsula, the minimum wage will increase RM50 to be RM1,050.

The cost of goods in Sabah is higher by around 30% than in the peninsula and, therefore, household spending is relatively higher compared with any other state in the country.

Industries largely blame the cost of logistics that include double shipping charges and underdeveloped infrastructures as reasons for the higher cost of goods and raw materials in the state.

As a result, much of the costs is passed down to consumers.

Sabah Indian-Muslim Coffee Shop Operators’ Association president Abdul Kadir Sikkandar said the RM130 increment was not much and will not affect business by much.

“The workers are also given overtime, as they work more than 12 hours a day. It is not so much of an increase surprisingly,” he told The Malaysian Insight.

Sabah Employers’ Association, meanwhile, said the new wage cap was not as high as expected but noted that Putrajaya should have consulted the stakeholders first before announcing a fresh hike.

Its president, Yap Cheen Boon, said they should have been part of the discussion and formulation of the minimum wage, as well as not having anyone in the tripartite Minimum Wage Council.

Sabah employers have constantly voiced out their views on the salary for Sabah workers but none had taken action over their concerns, he said.

Yap said the standardisation of salaries should not be done as there are differences in the levels of development across the nation.

He said ensuring equal economic progress was paramount before standardising minimum wage.

“The impact of costs will come from the flow-on effect, with employers having to increase salaries of more experienced workers already earning above the minimum wage to retain them and to create a productivity-led gap between them and new workers who would soon be getting a higher minimum wage,” Yap said.

The agriculture, forestry and fishing sectors in Sabah employ the biggest official workforce at 582,000 while the state services sector employs around 466,000 in wholesale, retail, accommodation, food and beverage.

According to Yap, Sabah’s labour-intensive industries will find it harder to cope with the flow-on salary increases if there are not proper ways to improve productivity.

“Moving forward, SEA calls on the Sabah government to look into setting up a dedicated state human resource (HR) ministry and to engage more actively with various industries on HR issues that concern 1.8 million locals and 780,000 foreign workers.”

He proposed policy reforms to align the minimum wage with Sabah’s economic conditions. – September 9, 2018.