Note our needs when fixing minimum wage, businesses tell govt

Small and medium enterprises (SMEs) are warning that a nationwide minimum wage increase could severely impact their profit margins, particularly those operating in smaller towns or rural areas. The SME Association of Malaysia (Samenta) suggests the government consider business size and location when raising the minimum wage, instead of implementing a uniform increase. Meanwhile, the Malaysian Employers Federation (MEF) proposes linking any wage increase to productivity levels.

Samenta president William Ng argues that an across-the-board wage hike would place a significant burden on smaller businesses, making it difficult for them to absorb the added operational costs. He notes that larger companies, multinational corporations, and government-linked companies (GLCs) in urban centers would fare better, as their median wage is already significantly higher than the current minimum wage.

In contrast, micro-enterprises and SMEs in rural areas, where the cost of living and business volumes differ greatly, would suffer the most.

Ng also warns that businesses may be forced to pass the cost of the wage increase onto consumers, potentially leading to inflation and negating the government's efforts to control it. To mitigate the impact, he suggests the government assist SMEs in reducing other operating costs by decreasing regulatory fees or offering targeted rebates on utility tariffs.

Human Resources Minister R Ramanan stated that the government is currently reviewing a proposal to raise the minimum wage, with a final decision to be made by the National Wages Consultative Council. The review will take into account factors such as the poverty line, median wage, inflation, labour productivity, and the unemployment rate.

Ramanan emphasized the importance of considering these elements to ensure the minimum wage is sustainable and does not negatively affect employers' financial capacity or ultimately harm job opportunities.