Minimum wage cannot be too high, says Dr M

Manirajan Ramasamy, Luqman Arif Abdul Karim

PETALING JAYA: The government’s decision to increase the minimum wage to RM1,050 was made based on Malaysia’s current financial standing, said Prime Minister Tun Dr Mahathir Mohamad today.

He said the government was aware of calls for the minimum wage to be increased to between RM1,500 and RM1,800.

However, he said, such an arrangement was not feasible as the government was facing a difficult time grappling with the country’s financial integrity.

“The (allocation) that was previously available was used to pay off huge amounts of debt and interest. That is why we were unable to increase government expenditure (to set the minimum wage and channel subsidies).

“If we want to compete with other countries, we cannot afford to increase (the minimum wage) too high because we may lose our competitiveness,” he said told reporters after chairing Pakatan Harapan Presidential Council meeting at Yayasan Selangor here today.

Effective January 1 2019, the minimum wage nationwide — including Sabah and Sarawak — will be RM1,050 per month or RM5.05 per hour, the Prime Minister’s Office announced Wednesday.

The move, however, received mixed reactions from labour unions, employers and the service industry stakeholders.

The Malaysian Trades Union Congress (MTUC) had accused the government of betraying the nation's low-income earners or those in the B40 bracket in fixing the new minimum wage.

Its secretary-general J. Solomon had said an increase of RM50 from RM1,000 was a pittance while an increase of RM130 for Sabah and Sarawak still stood below the poverty line of RM1,180 in Sabah.

Malaysian Employers Federation executive secretary Datuk Shamsuddin Bardan, meanwhile, had said the prices of goods may surge following the increase in minimum wage.

He had said the absence of government subsidies would increase the operating expenditure of companies, and that the extra costs would be transferred to the consumers. © New Straits Times Press (M) Bhd