Samenta: Get more input from SMEs before June 2024 progressive wage model trial run

KUALA LUMPUR: Small and Medium Enterprises Association (Samenta) has urged the government to get more input from industry players prior to the trial run for the Progressive Wage Model in June next year.

Samenta noted that it remains committed to supporting the government and in raising the floor for Malaysians, without burdening the SMEs further, given the difficult economic climate the industry is operating in.

"Samenta is supportive of any effort to raise the income of Malaysians. It is a deplorable state of affairs that more than half of all Malaysians are earning below subsistence wage. "It is a common myth that SMEs do not want to pay more for talents with the right skills. In our recent survey in September, two out of three SMEs named talent shortage as their primary challenge. "As such, no right-thinking SME owner would hold out on paying more to workers if their business margin permits it," it said.

The association agreed with Economy minister Rafizi Ramli who pointed out that local SMEs would both benefit the most as well as affected the most by the introduction of the Progressive Wage Model.

"He has also indicated that the viewpoints of employer groups and trade unions have been sought in drafting the white paper. "We would like to urge the minister and the ministry to quickly bring the conversation to the SMEs, who may or may not be represented by the employer associations, and whose specific needs and challenges may not have been adequately represented in the policy discussion surrounding the Progressive Wage Model," stated Samenta.

It added that a quantum of increment to be suggested by trade unions and groups representing large employers may not be reflective of the financial capability of SMEs.

"Further, any increment of productivity and profitability in any sector may not be reflective of the disparity in productivity gain between larger firms and SMEs.

"The minister has rightly pointed out that our Gini co-efficient of circa 0.400 can certainly be improved with the right policy levers. "However, if we are concerned about reducing income inequality in Malaysia, forced wage increment must not be the only tool. "As such, we welcome the statement of YB Rafizi Ramli that there will be no further increment in minimum wage as we trial the progressive wage model," Samenta said.

On Thursday, the government tabled a white paper outlining its plans for a pilot project on the progressive wage policy between June and September next year. The proposal targets workers earning less than RM5,000 per month.

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