FMM dismisses MTUC’s RM3,100 minimum wage proposal as unrealistic for businesses

The Federation of Malaysian Manufacturers (FMM) has dismissed the Malaysian Trades Union Congress (MTUC) proposal to raise the national minimum wage to RM3,100, arguing it is unrealistic for businesses. FMM president Jacob Lee Chor Kok cautioned that an 82.4% increase is not in line with economic realities. He emphasized that such an abrupt rise cannot occur without considering productivity gains, employer affordability, export competitiveness, inflation, and the impact on other pay scales.

The proposal follows MTUC secretary-general Kamarul Baharin Mansor's statement that RM3,100 is a necessary living wage benchmark. Kamarul argued that statutory reviews should not automatically trigger rate hikes, as this dismisses the plight of low-income earners. The next mandatory statutory wage review is set for February 2027, with the current RM1,700 threshold in place since February 2025.

FMM pointed out that previous wage revisions have been gradual, rising incrementally over the past decade. They cautioned that a sudden jump to RM3,100 would leave employers struggling to maintain internal pay differentials, potentially leading to higher operational costs, business closures, and reduced hiring, particularly among small and medium enterprises (SMEs).

FMM warned that this wage increase would widen the gap between Malaysia and competing Asean manufacturing hubs, whose monthly wages range from roughly RM570 to RM1,300. They urged that all wage revisions should follow the tripartite National Wages Consultative Council (NWCC) framework, relying on data about productivity, cost of living, sector-specific health, and employer balance sheets.

FMM also called for moderate, predictable adjustments with ample notice and fiscal support for SMEs in the upcoming Budget 2027.