Malaysia can only afford RM50 minimum wage hike for now, says Kula

Human Resources Minister M Kulasegaran says employers should be prepared for more increases in the minimum wage in future.

KUALA LUMPUR: The government’s decision to raise the minimum wage to RM1,050 monthly is based on a review of the economic growth and financial situation in the country, Human Resources Minister M Kulasegaran said today.

He said the increase of just RM50 for workers in Peninsular Malaysia was a “painful” decision and it was not meant to belittle their contributions, especially those in the bottom 40% of wage earners.

“This is not the end of the journey for minimum wage in Malaysia. We have been in power for the past four months only and we are determined to achieve the promises made in our manifesto, including the minimum wage agenda, by the end of our term.

“As far as the minimum wage is concerned, employers are required to be prepared for an increase over the coming years,” he said in a statement today.

Kulasegaran also pointed out that the economy grew at a slower pace of 4.5% in the second quarter of 2018, compared to 5.4% in the first quarter of the year and further highlighted lower net inflow of foreign direct investments at RM2.8 billion in the second quarter of 2018, compared to RM12 billion in the first quarter of the year.

“All these are worrying factors, which we have to address first, besides the financial mess left behind by the previous government,” said the DAP lawmaker.

Kulasegaran said the hike in the minimum wage was in line with the Pakatan Harapan’s manifesto to increase it within the first 100 days of its administration, and to standardise the rate throughout Malaysia.

The second part of the promise, Kulasegaran said, was to raise the minimum wage to RM1,500 a month within the first term or within five years of PH’s administration.

The government recently announced the minimum wage for the private sector will be raised to RM1,050 monthly nationwide starting from January 1 next year.

The current minimum wage for Peninsular Malaysia is RM1,000 while for Sabah and Sarawak, it is at RM920.

However, workers unions have criticised the quantum of increase, saying an RM50 hike in Peninsular Malaysia was meaningless.