Steven Sim: Wage subsidies can help SMEs raise salaries
KUALA LUMPUR: Entrepreneur and Cooperatives Development Minister Steven Sim wants the government to consider wage subsidies to help small and medium enterprises (SMEs) raise salaries without bearing the full cost.
Entrepreneur Steven Sim, Malaysia's Cooperatives Development Minister, is advocating for wage subsidies to assist small and medium enterprises (SMEs) in increasing salaries. Sim argues that wage hikes should be shared between employers and the government, with the latter playing an active role in encouraging and rewarding businesses that invest in productivity, training, and technology.
He cites the Progressive Wage Policy from his previous role as HR minister as an example of shared responsibility, where employers could voluntarily raise wages while the government subsidized part of the increase. Sim emphasizes that Malaysia must raise wages to attract and retain talent, as businesses compete for skilled workers and younger Malaysians seek better-paying jobs.
He warns that wage increases without productivity gains could lead to inflation, while productivity growth without wage increases risks losing talent. Sim stresses that wage growth should not be seen as a zero-sum game between employers and workers, and that businesses must remain profitable while sharing gains with employees fairly.
The call for wage subsidies comes as the government considers raising the minimum wage and balancing workers' welfare with business sustainability.
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