RM3,100 GLC wage no basis for national minimum, say employers

Employers and business groups are cautioning against using big companies like government-linked corporations (GLCs) as the basis for setting minimum wage levels. The Malaysian Employers Federation (MEF) and the Federation of Malaysian Manufacturers (FMM) argue that small businesses operate in a different environment, making it challenging for them to afford higher wages.

MEF senior advisor Syed Hussain Syed Husman explained that the profitability, productivity, and ability to absorb wage costs of GLCs and government-linked investment companies (GLICs) are significantly different from those of small and medium-sized enterprises (SMEs). Statistics show that the median monthly wage in the formal sector is already RM3,027, which exceeds the current RM1,700 minimum wage.

Raising the minimum wage to RM3,100 would entail an 82.4% increase in wage costs for these businesses, potentially leading to higher expenses such as overtime payments, statutory contributions, and overall salaries. The Malaysian Trades Union Congress (MTUC) had recommended a minimum wage of RM3,100 per month in Budget 2027. The government has designated RM3,100 as a living wage for GLC and GLIC employees.

According to the Employees Provident Fund and Universiti Malaya, a monthly income of RM3,100 would enable a family to participate in society, engage in personal interests, and support family development without financial stress. Prime Minister Anwar Ibrahim mentioned that 34 GLCs and GLICs had already adopted the RM3,100 living wage.

FMM president Jacob Lee stated that workers' wages should be increased when companies perform well, but the profits of a few large firms do not represent the situation faced by most businesses. He emphasized that a substantial increase in the minimum wage would also raise salaries for more experienced workers, as companies would need to maintain a gap between junior and senior staff.

William Ng from the Small and Medium Enterprises Association of Malaysia (Samenta) agreed that workers should earn more, but cautioned that a RM3,100 minimum wage would be too high for most SMEs. He suggested that such an increase could force some firms to stop hiring, lay off employees, or even go out of business, as small businesses are already grappling with rising costs in areas like electricity, transport, and raw materials.