Wage policy needed to tackle rising CPI

by AZALEA AZUAR / pic TMR FILE

A PROGRESSIVE wage policy must be implemented due to the rising Consumer Price Index (CPI).

Bernama reported UniKL Business School economic analyst Assoc Prof Dr Aimi Zulhazmi Abdul Rashid as saying that implementing a progressive wage policy can improve economic development and increase.

“With the minimum wage policy and the progressive wage policy, we have to be sensitive to what is happening.

“It is not only one side that we want to help in terms of purchasing power, but we need to progressively increase the salary itself,” he said.

Aimi Zulhazmi also remembered former Prime Minister’s Department (Economy) Minister Datuk Seri Mustapa Mohamed warning about the inflation rising to 11% without government subsidies and intervention.

Moreover, the purchasing power of consumers might be affected if wage policies are not implemented.

Aimi Zulhazmi emphasised the need for the government to balance salary increases while avoiding pressure on businesses, particularly small and medium enterprises (SMEs).

“We have to understand that the position of SMEs is critical in our economy, not because 90% of the business entities in Malaysia are SMEs, but because they are employers to almost 60% of the 16 million workforces in Malaysia.

“So, if SMEs are the ones who are depressed, how are they, who contribute almost 40% to our GDP, able to grow?” he added.

Aimi Zulhazmi suggested that the government should enforce progressive wage policies quickly, as small companies may struggle to comply without increasing auditing costs.

Therefore, he suggested tax reduction and reduced incentives for SMEs to increase wages and to allow them to increase customer fees.