KUALA LUMPUR: Despite employer and industry outcry over the government's decision to implement the new RM1,500 minimum wage, one expert believes that the move should be viewed holistically.
Dr Irwan Shah Zainal Abidin, an associate professor at Universiti Utara Malaysia and former director of the Asean Research Institute of Banking and Finance, said the people should be reminded that the move was in line with the Poverty Line Income Limit (PGK), which had been increased to RM2,208.
"On the surface, it (new minimum wage) could be seen as piling the pressure on the rising cost of inputs in production.
"However, one needs to view it holistically, such as its impact on employee performance and productivity, ultimately resulting in an increase in the profit margin of the business itself.
"In other words, one should look at how this increase in the minimum wage can affect the efficiency and competitiveness of the business as a whole.
"In the context of labourers, this increase in the minimum wage has, to some extent, helped them in facing the era of the rising cost of living and also inflation, especially the B40 group," he told the New Straits Times.
Irwan Shah, who is also a visiting research fellow in Islamic Finance at the Oxford Centre for Islamic Studies at Oxford University, said the new minimum wage of RM1,500 was still lower than the PGK.
"If a household has both husband and wife working, and earning the minimum wage, they are still categorised as poor.
"Still, we have not discussed the concept of living wage, which, according to Bank Negara Malaysia, was at RM2,700 in 2017. So what would the rate be like today?"
Irwan Shah believed that the rising cost of living, along with inflation, would take time to resolve. He said as such, the government should provide hand-outs to targeted groups and ensure that the economy continued to grow in a sustainable manner.
"Inflation and the rising cost of living will take time to resolve, so the people need help from the government at this point.
"At the same time, the government also needs to ensure that the economy continues to grow so that new jobs can be created.
"The social security network also needs to be strengthened so that the people, especially the B40 and vulnerable groups, can gain access to assistance in the future without the need for ad-hoc measures."
Irwan Shah said the government could consider introducing new policies such as a universal basic income and job guarantee scheme, or a universal pension scheme. He said the other options to consider were universal social protection or universal basic services.
He conceded that these were, however, medium- and long-term strategies.
"In the short term, these groups need to be helped by giving cash directly, or food vouchers or a coupon system to help supply their daily needs without being abused by others."
Irwan Shah said the government should also consider revising the blanket fuel subsidy policy.
"These fuel subsidy policies are more helpful to the rich or the T20 group than the poor or B40 group.
"If the government continues with the current fuel subsidy practice, who will benefit the most? It would naturally be those who own more cars and luxury vehicles. What do the poor get if they don't even own a car?
"So there is a need for change so that the implementation of these subsidies is targeted at the people who truly deserve them."
Kedah Labour director Arzanil Bahadon said only micro-scale employers with fewer than five workers, such as sundry shops, stalls, eateries and small enterprises, were exempted from the new minimum wage order until the end of the year.
"Other employers, regardless of the sector or nature of business, are required to comply with the new minimum wage order.
"These include employers in the professional sector such as small private clinics and small law firms, despite having fewer than five employees."
Arzanil said the department had yet to receive any official complaint from workers in Kedah about the minimum wage since it was implemented in May.
"Those who wish to lodge a complaint may walk in to any Labour office in Alor Star, Kulim, Sungai Petani and Langkawi.
"They may also file a report via the mobile application, Working for Workers, which is available in Apps Store and Google Play"
He added that once a report was filed, the department would carry out an investigation and issue a reminder to the employer to comply with the order. He said the department would launch an investigation if the employer failed to do so.