AS Sarawak’s business community overwork their calculators on the impact of the new minimum wage and count if they can afford new workers, many are also baffled why they were not consulted on the new rate.

Wee Hong Seng, the proprietor of a traditional family business at Kuching’s famous thoroughfare, India Street, said there was no engagement between the government and employers on raising the minimum wage in the state from RM920 to RM1,050.

“The government has no business to tell us how to run our business. They just shoved it on us. I believe it was to fulfil a promise in their manifesto but that to me, is just not right,” said Wee.

As president of the India Street Merchants’ Association, Wee was also voicing the views of the “small business merchants” – textile traders, coffee shop and bookstore owners, Chinese herbal shop owners and hardware dealers – many whose forefathers had traded there since the time of the White Rajah.

Some of the businesses have been managed by four generations of the same family.

“When they raised the minimum wage to RM1,050, did they make any study on what sort of impact the previous minimum wage had?” Wee asked.

“Can we afford it?” 

Wee, who is also a Kuching City North commissioner, said the government should have left it to businessmen to determine the minimum wage.

The new minimum wage would have a negative effect on the morale of staff, especially among the smaller businesses, the coffee shops and food shops, in particular, which employ a large number of staff, he said.

Wee has 10 workers in his textile and fabric shop.

“As I am now forced to raise the salary of two of my workers by RM130, from the old level of RM920 to the new level, I also have to raise the salary of my other eight long-serving, loyal staff.

“Otherwise, they would complain of not getting any increment when the new, less experienced staff suddenly get a hefty increase.

“The new minimum wage not only affects the workers. It will affect everybody, from the owners downwards. It will affect the company’s business,” Wee told The Malaysian Insight.

He said the government has not given any thought when to implement the policy, adding there must be a way to ease the policy in.

The new wage level, which comes into force on January 1 next year, however, will not lead to a price hike in essential goods, according to the Malaysian Employers Federation (MEF) Miri branch.

That is because business owners would not choose to increase the prices of goods due to the present economic situation, its chairman, John Teo, said.

He said some businesses have yet to recover after the drop in oil prices at the end of 2015.

“Business owners will choose to absorb the difference in the increase of the minimum wage, hoping that their business would not be affected.”

The workers’ representative, the Sarawak chapter of Malaysian Trades Union Congress (MTUC) is livid with the new minimum wage deal.

MTUC said the increase is negligible and a “sell out” by the present government.

Sarawak MTUC secretary Andrew Lo said the fixing of the new level was not based on sustainable economic policy and conditions of the labour market.

Lo said the new level was determined by a “proposal from employers”, and not the full recommendation of the Minimum Wage Council.

He said the increment only represents a 5% increase “when the official inflation has increased by at least 10% and the labour productivity up by 8% during the period under review”.

Workers’ rights have been hijacked by employers and the government, he said.

“The minimum wage must be recommended by the Minimum Wage Council after taking into account the relevant socio-economic factors.

“Its increase must be based on sustainable economic policy and labour market, not at the whims and fancies of politicians.”

Lo said the formula to calculate the minimum wage should be consistent and reflect the relevant values. – September 9, 2018.