PETALING JAYA: Most businesses are already paying employees above the minimum wage, especially for semi-skilled and skilled workers, says Small and Medium Enterprises Association (Samenta) president William Ng.
Commenting on Pakatan Harapan MP M Kula Segaran’s call for the government to consider increasing the current minimum wage of RM1,500 to more than RM2,000, Ng said such a move could lead to job reductions and inflation.
“Today, it is an employees market, and we should allow the market to dictate wages.
“Determining the minimum wage without taking productivity and profitability into consideration may lead to either the businesses cutting down the number of jobs or passing the increased costs to consumers,” he told FMT.
Last week, Kula, a former human resources minister, suggested that the government should consider increasing the current minimum wage. He referred to a living wage proposal presented in a 2017 study by Bank Negara Malaysia (BNM).
Ng said talks on a higher minimum wage should be halted as the government is considering the implementation of a progressive wage model.
“Samenta is against any minimum wage increment at this juncture until we have better clarity on the progressive wage model suggested by the government.”
Meanwhile, Lai Wei Sieng of Universiti Kebangsaan Malaysia welcomed Kula’s suggestion, saying it would improve the quality of life for low-income earners.
He said this would stimulate economic growth and contribute to the country’s GDP.
The economist said suggestions of significant inflation as a consequence of higher minimum wage were an exaggeration.
“The increase in buying power is limited to low-income households only. It will not increase the overall buying power of the people since not all citizens will receive a salary increment.
“Even if the demands for commodities increase, the inflation would still be minimal as most commodities are price-controlled items,” Lai told FMT.
He said low-income households typically prioritise spending on necessities as they struggle to make ends meet.
Lai said the higher minimum wage should be seen as a short-term solution, while the progressive wage model brought forth by the government would be the long-term solution to improving the people’s quality of life.