MRA urges govt to ‘zone’ minimum wages

This will help to better address the issue of labour shortage and the increasing cost of living in the urban areas

by AZALEA AZUAR / pic by MUHD AMIN NAHARUL

THE Malaysia Retailers Association (MRA) is urging the Human Resources Ministry to categorise minimum wages according to zones.

The association argued that many Malaysian workers have decided to return to their hometowns where the costs of living are lower, while also enjoying the same wages as workers in the city due to the increased standardised minimum wage rate.

Unfortunately, this has led to labour shortage, especially in the Klang Valley, while the retail industry has to deal with “compression wage adjustments” for those earning at the borderline RM1,500 and above.

These pressures also affect Malaysian consumers who are already suffering severe inflation costs of all sorts.

MRA president Datuk Andrew Lim Tat hoped the government can re-categorise the structure of consumers to bottom 60% income group (B60), middle 20% income group (M20) and top 20% income group (T20) instead of the current B40, M40 and T20.

“We urge the government to also assist Malaysian consumers with a stimulus package to what I now call the B60. There are no longer the B40, M40 and T20.

“A lot of people suffered financial losses as well as dislocation during the last three to five months,” he said at a press conference today.

He added that the government should not interfere in the market mechanism as price will naturally gravitate upwards without their intervention, and allow the forces of supply and demand to work itself.

To address Malaysia’s labour shortage and high unemployment rate, MRA hoped the government could allow the retail industry to recruit foreign workers for both frontline work and in the office.

Although the government has revealed that Malaysia’s unemployment rate has dipped to 4.1%, the association remains sceptical with the data as it may include those who are gig workers and did not reflect the current situation of the country.

“In truth, there are many vacancies out there but not many people are applying for jobs and the workforce is expecting shorter working hours, flexi-work hours and higher pay irrespective of productivity.

“So, any increased wages and salaries must be accompanied by corresponding improvements in productivity,” Lim said.

Moreover, MRA also called for Bank Negara Malaysia to address Malaysia’s depreciating ringgit as it is currently at the second weakest point since the 1997 financial crises.

Meanwhile, the government has plans to reintroduce the Goods and Services Tax (GST) to replace the current Sales and Services Tax (SST).

MRA suggested that GST should be re-implemented in two years’ time and pegged lower at 3% where personal and corporate income taxes must be correspondingly reduced.

It believed that GST is an efficient consumption tax and enabled the government to spend more on developing the nation as well as assist poor communities due to its broad base.

To tackle the depreciating ringgit and inflationary pressures, MRA hoped that it could hold a “retail stakeholders engagement” with the Domestic Trade and Consumer Affairs Ministry and the National Action Council on Cost of Living.

At the same time, Lim hoped that Ukraine and Russia could put an end to their conflict, which is among the main causes of the global inflation.

The effects of the war have pushed oil and gas prices to US$135 (RM594) per barrel and made commodities scarce.

“When the commodities coming from Russia and Ukraine have been sanctioned by the rest of the world, they are going to be passed on to our consumers,” he added.

Therefore, MRA urged the government to come up with better programmes or schemes to assist Malaysian consumers during this inflation period.