MTEM supports minimum wage increase proposal

by AUFA MARDHIAH / Pic by MUHD AMIN NAHARUL

THE Malay Economic Action Council (MTEM) supports the Human Resource Ministry’s (MoHR) proposal to increase the minimum monthly wage to RM1,500 by the end of the year. 

However, it urged the government to set the minimum wage at RM1,350 effective immediately before the RM1,500 increase by end of the year or early 2023, as most Malaysians have depleted their Employees Provident Fund savings due to the Covid-19 pandemic to make ends meet. 

MTEM chairman Malim Husin said the Minimum Wage Order of 2020, which was terminated at the end of 2021, has affected Malaysians in the long run. 

“For a start, the minimum wage for February 2022 can be raised to RM1,350 and reach RM1,500 by end of the year. 

“According to the international benchmark, the minimum wage should be about 60% of the median wage, so Malaysia’s minimum wage should already be RM1,465 with a median wage of RM2,442 pre-pandemic,” he said in a statement yesterday. 

On the other hand, the “minimum wage formula” by MoHR stated that the minimum wage should be RM1,832 according to the national average of poverty line income, productivity and Consumer Price Index elements. 

“The minimum wage in Malaysia is lower than Jakarta’s US$326 (RM1,369) per month (based on 40 working hours per week) compared to Malaysia’s US$286 or equivalent to RM1,200 (based on 48 working hours per week). 

“To compare it to the minimum wage according to GDP per capita, Malaysia pays a lot less to workers with only 25% of the country’s per capita GDP, compared to Indonesia and the Philippines with 84% and 76% respectively in major urban areas,” he added. 

Therefore, MTEM asked the government to consider mechanisms to improve the wages of the middle class.

On the contrary, Small and Medium Enterprises Association Malaysia (Semanta) chairman Datuk William Ng urged the government to align any increment in the minimum wage to the growth in GDP and labour productivity. 

He said in the third quarter of 2021, the labour productivity has declined by 5.6%. 

Therefore, Semanta suggested for the government to link income to productivity moving forward due to the growing interest among businesses, including SMEs in the Productivity-Linked Wage System. 

“The interests of both businesses and working Malaysians are best served when income is tied to productivity, rather than a minimum wage premised upon workers working a fixed number of hours,” Ng added. 

Previously, senior researcher of DMAnalytics Sdn Bhd Zouhair Mohd Rosli interjected the Malaysian Employers Federation’s (MEF) statement that the minimum wage of RM1,500 would kill many businesses and derail economic recovery. 

He also disagreed with MEF’s opinion that the increase of minimum wage would increase unemployment. 

Concurrently, the Malaysian Security Industry Association (PIKM) also disagreed with the government’s proposal to raise the minimum monthly wage. 

According to president Datuk Seri Ramli Yusuff, the proposed increase will hugely impact PIKM members due to the previous minimum wage adjustment that has yet to be paid. 

Although the association acknowledged the benefit of the minimum wage requirement to the workforce, it suggested that the government refine the proposal by taking into account the current global economic downturn and rising inflation.