Higher starting salaries expected to improve workers' livelihoods

BATU GAJAH - A vehicle assembly industry worker, who took 11 years to reach a salary above RM2,500 a month, has described the proposed starting salary of RM2,500 for graduates and semi-skilled workers as an opportunity for the younger generation to enjoy a better quality of life.

For 41-year-old Mohamad Farid Faquan Sadarudin, who began his career in 2015 with a salary of RM1,400, a pay rise is more than just a figure on a payslip, saying it could determine the extent to which an employee is able to meet living expenses, save for emergencies and plan for the family’s future.

The father of one, whose child is six years old, said that with a starting salary of RM2,500, new workers have the opportunity to begin their working lives on a stronger financial footing, especially as the cost of basic necessities continues to rise.

"When we first started working, our salaries were low, they were not enough. We had to pay rent, car installments and basic expenses, and the money was simply insufficient. But now, if the starting salary is RM2,500, that is a good thing,” he told Bernama recently.

Meanwhile, technician Mohd Ariff Farhan Kamarzaman, 37, said the proposed wage policy would give workers greater scope to plan for home ownership, build emergency savings and obtain private health insurance.

"For someone like me who is still single, a salary increase would help with household expenses and commitments such as supporting my parents, and also open up opportunities for me to own a house as I am currently renting,” said Mohd Ariff Farhan, who holds a diploma in Mechanical Engineering from the Ungku Omar Polytechnic here.

Mohd Ariff Farhan, who started working in 2015 with a salary of RM1,500, said his monthly expenses for daily necessities, including food, utility bills and fuel, exceeded RM1,000, while his monthly rent was between RM500 and RM600.

Meanwhile, Institut Darul Ridzuan (IDR) chief executive Dr Zulqarnain Mohamad said the proposal had the potential to curb labour migration from Perak, in addition to increasing the purchasing power of the people and boosting the state’s economic growth.

He said more competitive salaries, supported by relatively low cost of living compared to states like Selangor and Penang, could attract workers to stay and build their careers in Perak.

"This has been proven by findings of the study carried out by the IDR to identify the needs of the people in the state. The Perak State Budget 2027 Study shows that utility costs are among the main spending challenges faced by the people, as cited by 74.2 per cent of respondents, compared with food costs at 72.7 per cent.

"This may be due to various initiatives undertaken by the state government, including the implementation of Pasar Sejahtera Rakyat Perak (PSRP), helping to address the cost-of-living issue and deliver a positive impact to the people at the grassroots level,” he added.

He said that Perak’s gross domestic product (GDP) grew by 5.7 per cent last year, surpassing national growth and reflecting the state’s positive economic development, adding that higher worker incomes could also serve as a catalyst for economic growth, strengthen local businesses, create quality jobs and raise the people’s incomes.

According to him, the development of five strategic growth hubs in the state - the Automotive Hi-Tech Valley in Tanjung Malim, Lumut Maritime Industrial City (LuMIC) in Manjung, Silver Valley Technology Park in the Kinta Valley, Kerian Integrated Green Industrial Park (KIGIP) and the Halal Industrial Park in Lekir - could help stimulate demand for manpower if the policy were implemented.

"Perak’s median salary in 2025 was RM2,173. If we increase the minimum wage to RM2,000 and RM2,500 for graduates and semi-skilled workers, we believe it would have a positive impact on local businesses and make employment opportunities in the state more attractive.

"For the past several years, we faced an outmigration of workers, with skilled and semi-skilled workers moving to other states. So, we believe that increasing incomes could serve as a pull factor, encouraging the people of Perak to remain in the state while also attracting those working elsewhere to return to Perak, contribute to its development and work here,” he said.

He said that, overall, an increase in workers’ earnings could help stimulate the state’s economy, in line with the Perak Sejahtera 2030 (Prosperous Perak 2030) aspiration to strengthen the state’s economy and improve the people’s well-being by raising the economic ceiling and the people’s income floor.

Universiti Pendidikan Sultan Idris (UPSI) Faculty of Management and Economics lecturer Associate Professor Dr Norasibah Abdul Jalil said implementing a starting salary of RM2,500 for semi-skilled workers had the potential to increase purchasing power and consumer spending, thus stimulating economic activity in Perak.

She said that based on a simulation involving a salary increase of RM278 per month for about 243,000 to 287,000 semi-skilled workers - equivalent to 60 per cent of the estimated total semi-skilled workforce in the state - the additional income for these workers is projected to be between RM810 million and RM957 million annually.

"Assuming that 80 per cent of the additional income is spent, the increase in consumer spending is estimated to reach RM648 million to RM766 million a year

"Although these figures are simulation estimates based on the assumption that other factors remain unchanged, and that not all additional spending would occur in Perak, the increase in workers’ purchasing power could stimulate domestic demand and support the growth of local businesses,” she added.

She expects the impact to be more pronounced in the services sector, which contributed 61.8 per cent to Perak’s GDP, especially in trade, hospitality, tourism and food and beverage services, which are all closely linked to consumer spending.

Other sectors that could benefit from the spillover effects of increased demand include manufacturing, agriculture and construction, which contributed 21 per cent, 13.6 per cent and 2.7 per cent to the state’s GDP respectively, followed by mining and quarrying at 0.6 per cent. - BERNAMA