Every RM100 wage hike could slash consumer firms' earnings 2.7pct: Analysts
KUALA LUMPUR: Every possible RM100 increase in minimum wage could cut consumer companies' earnings by up to 2.7 per cent, according to analysts.
Analysts warn that a RM100 increase in the minimum wage could reduce earnings for consumer companies by up to 2.7%, according to a new report. Kenanga Research explains that the impact would vary across sectors, with labor-intensive businesses facing more significant cost pressures. The firm also notes that consumers with higher incomes could partially offset the earnings decline.
BIMB Securities supports the idea of raising the wage to RM2,000, believing it would bolster household incomes and domestic demand without causing significant inflation. They point out that food costs make up about 30% of the consumer price index, suggesting a RM2,000 minimum wage would likely increase incomes rather than spark price hikes.
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