Smaller firms face uphill climb to RM3,000 minimum wage by 2030
KUALA LUMPUR: Malaysian businesses cannot keep digging deeper into their pockets to fund higher wages without a corresponding rise in productivity, particularly as smaller firms grapple with shrinking margins and rising operating costs.
Malaysian businesses face an uphill battle to reach a RM3,000 minimum wage by 2030, with smaller firms struggling to absorb additional costs, according to Malaysian Employers Federation adviser Datuk Shamsuddin Bardan. MSMEs, which once enjoyed margins around 15%, are now seeing them drop to as low as 10%. Bardan warns that without addressing productivity, simply raising wages would be unfeasible for these smaller industries.
To achieve this target, workers must acquire new skills and become more versatile, while companies must invest in automation, digitalisation, and improved work processes. A more skilled workforce could allow existing employees to accomplish more with fewer workers. However, upgrading workers alone is insufficient; companies must also replace outdated technology, a challenge many cannot afford.
Bardan calls for lower-cost financing and potential grants to help smaller businesses upgrade their technology. He cautions that higher wages without improved productivity may ultimately burden consumers with higher prices, creating a vicious cycle. While the government's Progressive Wage Policy could help, it should not become a permanent safety net.
Instead, a virtuous cycle should emerge, with better-trained workers becoming more productive, companies able to afford higher wages, and employers retaining skilled staff.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
