RM5,000 'decent salary' proposal out of touch with economic reality, says employers' group

SHAH ALAM – The proposal that a decent salary should be RM5,000 and above for single individuals and families with two children is viewed as unrealistic in the current economic context.

Malaysian Employers Federation (MEF) president, Datuk Dr Syed Hussain Syed Husman said this was because most employers, particularly in the micro, small and medium enterprise (MSME) sectors, were still struggling to stabilise their financial footing after the Covid-19 pandemic.

Rising operational costs, disruptions in global supply chains and shifts in consumer demand had limited employers' ability to offer salary increases without affecting business continuity. - Bernama photo

According to him, rising operational costs, disruptions in global supply chains and shifts in consumer demand had limited employers' ability to offer salary increases without affecting business continuity.

"Generally, any proposal to set a decent wage at RM5,000 and above did not take into account the current realities faced by employers and the global economic landscape, especially following the implementation of reciprocal tariffs by the United States (US) on exporters, including Malaysia.

"The US's imposition of a 24 per cent reciprocal tariff on Malaysian products added pressure to the country's export competitiveness, even though it had been deferred for three months.

"This directly affected company revenues, especially in the manufacturing and export sectors.

"If labour costs also rise sharply, Malaysian exporters might lose international markets and investors might shift to countries offering more competitive labour costs," he told Sinar.

Recently, UniKL Business School economist Associate Professor Dr Aimi Zulhazmi Abdul Rashid opined that the ideal and decent wage for single individuals or families with two children should be around RM5,000 and above, depending on whether they live in urban or rural areas.

He stated that, based on data from the Department of Statistics Malaysia (DOSM), the average monthly basic decent living expenses (PAKW) for a household in 2023 was RM4,729.

In fact, he further clarified that the PAKW in urban areas was higher than in rural areas, with figures at RM5,040 and RM3,631 respectively.

To this, Syed Hussain believes that discussions on salary issues should be carried out comprehensively, involving the government, employers and employees, based on productivity data and actual economic growth.

He also suggested that salary increases should be implemented gradually, in line with rising productivity and employers’ financial capabilities.