KUALA LUMPUR: Employers and business organisations have expressed concern over the government’s move to raise the minimum wage to RM1,200 in 57 cities and towns on Jan 1.
The minimum wage in small towns and rural areas will stay at the present rate of RM1,100.
They cited unfair cost increases, discrimination and breach of promise of the Pakatan Harapan (PH) government manifesto for their opposition to the move.
They said the PH government had not fulfilled its manifesto promise No 34 to share the burden arising from the hike in the minimum wage from RM1,000 to RM1,500 equally with employers during their first term in office.
“The government has raised the minimum wage three times since 2018 and all the cost increases are wholly borne by employers.
“This is unfair and reflects lack of integrity on the part of the Pakatan Harapan government in fulfilling their promise to share 50 per cent of the cost increases for setting a higher minimum wage,” said Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan.
He said this in a statement after representatives of 37 employer and business organisations met at the MEF headquarters in Petaling Jaya today to express concern over the government’s decision.
Shamsuddn said this was not the time to increase the cost of doing business.
“Malaysia is affected by the sluggish global economy and this is reflected by the high number of retrenchments.
“If the government cannot fulfil their promise to share 50 per cent of the cost then there should not be any further increases in the minimum wage.
“The status quo should remain”, he said
Furthermore, Shamsuddin said, any increase in the minimum wage would mostly benefit foreign workers and not local workers.
“The foreign workers will repatriate the extra income to their home countries resulting in the ringgit being further weakened.
“It is estimated that the increase in the minimum wage will result in about RM2.5 billion (extra) yearly in remittances to the home countries of foreign workers.
“Currently, foreign workers repatriate about RM34 billion yearly.”
He said the figure did not include remittances made by illegal foreign workers.
Shamsuddin said the minimum wage hike would cause distress and anxiety among employers and employees.
He said this was because the geographical demarcation was unclear, discriminatory and contradicted the government’s policy of inclusiveness.
For example, he said, the palm oil industry would face major problems as some plantations were located within the 57 cities and towns.
He said these plantations would be subjected to scrutiny by the Roundtable on Sustainable Palm Oil and the Malaysian Sustainable Palm Oil in terms of alleged discriminatory practices.
“We urge the government to reconsider its decision to raise the minimum wage at this juncture as it would be too burdensome on private sector employers.
“Instead of raising the minimum wage, the policies implemented should focus on improving productivity and competitiveness.”
Since Jan 1, last year, the minimum wage has been revised upwards three times from RM1,000 and RM920 (for Peninsular Malaysia and Sabah and Sarawak respectively) to RM1,050 and RM970, and thereafter to RM1,100.
He said this contradicted the principle laid down in the National Wages Consultative Council Act 2011 (NWCC Act 2011) which provides that the minimum wage may be reviewed every two years.
He added that this was also stated in the PH manifesto.