ALOR STAR: The Kedah Malay Chambers of Commerce (DPMM) has backed calls from economists and consumer groups for the government to raise the minimum wage in its upcoming review.
DPMM Kedah charter president Datuk Mohd Zayad Md Ismail agreed with a minimum wage hike as the country's wage rates are significantly lower compared to many other countries.
He stressed that one of the primary reasons for the economy's stagnation and lack of sustainability is the phenomenon of underconsumption stemming from weak purchasing power due to low wages.
"While I acknowledge that implementing a minimum wage increase will undoubtedly affect businesses, it must be understood that raising wages will also have dual effects.
"In addition to increasing operating costs, it will also boost demand for a variety of goods and services due to the multiplier effect.
"I believe that increasing wages and household income will indeed contribute to the recovery and growth of the economy as domestic demand expands," he told the New Straits Times.
Zayad said that raising wages can also serve as an incentive for industries to transition to less labor-intensive approaches and focus more on skills and technology.
"I also see the justification in raising this minimum wage as urgent given the significant rise in the cost of living. Moreover, the impact of rising taxes, water, electricity, and essential goods costs severely burdens the working class.
"This proposal, if implemented, will undoubtedly have a meaningful impact on workers from low-income backgrounds, most of whom are indigenous Malays, Sabahans, Sarawakians, and Orang Asli," he added.
Zayad acknowledged that there were concerns about the inability of small and medium-sized enterprises (SMEs) to absorb increase in costs, potentially resorting to layoffs, creating further issues such as unemployment.
"In this regard, alongside the increase in the minimum wage, government support towards private employers, especially SMEs and micro-enterprises, is necessary to enable them to retain existing employees, thereby helping to stabilise the labor market and create more quality jobs in the long run," he added.
He said that while raising minimum wage, efforts must be made by the government to control increases in product and service costs.
He added that the more critical aspect of the wage issue was the need for a balanced and realistic approach.
"The implementation of a minimum wage of RM1,800 per month, in my opinion, is a reasonable figure but should be gradually implemented or more targeted according to the industry to mitigate sudden shocks from cost increases," he added.
On Thursday, Human Resources Minister Steven Sim had announced that the government would review the minimum wage rate this year, taking into account the perspectives of both employers and employees.
He had said the review would be guided by the National Wages Consultative Council Act 2011.
In response, economists and consumer groups have advocated for a wage increase in the review.
Geoffrey Williams, an economics professor at the Malaysian University of Science and Technology, suggested that the minimum wage should ideally align with living wage, which would set the minimum wage at RM2,500 to RM3,000 for a single person.
The Consumers Association of Kedah (Cake) has also urged the government to raise the minimum wage from the current RM1,500 by at least 40 per cent to RM2,100.