Hike in minimum wages may see workers out of jobs, says economist

22 Apr 2022 08:00am

From May 1, employers will start paying workers a minimum wage of RM1,500 from RM1,200.

SHAH ALAM - The new minimum wage hike may see more small businesses closing down operations, an economist said further questioning Putrajaya if a cost-benefit analysis was carried out before implementing it on May 1.

Economist Barjoyai Bardai of Universiti Tun Abdul Razak said even though it is a good move but the timing may not be right as companies reeling from Covid lockdowns and the worst December floods may close operations.

"The tourism sector is still affected from border shutdowns," he told Sinar Daily.

Barjoyai said employers may also fail to pay higher wages from RM1,200 to RM1,500. In 2012, minimum wages were increased from RM900, causing many security companies to shut down.

Now with Covid lockdowns, the situation may worsen, he added.

He said the minimum wage system was supposed to improve the welfare of workers but it may fail to do so if more companies shut down businesses. Due to that, he asked if a cost-benefit analysis was done before the sudden move to implement minimum wages on May 1.

He asked if the government had carried out consultation with stakeholders, including micro-businesses.

Meanwhile, National Union of Bank Employees (NUBE) sec-gen J Soloman hopes the current government will not delay the implementation since it is long overdue.

"I hope the government is able to distinguish what is minimum wage and a living wage," he told Sinar Daily.

"If the government can’t even implement RM1,500 as a minimum wage for all workers in Malaysia, how can Malaysians, in general have any hope in the government to provide social protection," he said.

He also said the government should stop bringing in foreign workers as it is a form of "addiction" to cheap migrant labour among employers as the continuous influx of foreign workers only enriches the pockets of foreign worker agencies.

"By reskilling and upskilling Malaysian workers, and paying them a decent wage, they will serve their organisation well. Stop enriching those who intend to make a fast buck by bringing foreign workers into the country," he added.