Higher minimum wage not a silver bullet, but crucial for income growth, says Johan Merican

KUALA LUMPUR, Oct 13 — Amidst the Post-Budget 2027 Debate, Treasury Secretary-General Tan Sri Johan Mahmood Merican emphasized that the RM2,000 minimum wage implementation is designed to facilitate businesses' transition to revised salary frameworks. Despite the ongoing geopolitical tensions in the Middle East, the plan includes an extended grace period for small and medium enterprises (MSMEs) to absorb the economic impact.

Merican pointed out that wage stagnation relative to living expenses contributes significantly to household financial distress. He emphasized that increasing earning capacity of workers is crucial, and the minimum wage rise, though not a standalone solution, plays a vital role in this strategy. The government will initiate this change with large companies, aiming for broader adjustments across salary structures.

Moreover, the RM3,400 living wage standard for government-linked companies (GLCs) serves as a benchmark for the private sector. The National Wages Consultative Council, including representatives from both trade unions and employers, endorsed this figure unanimously.