Minimum wage hike bad for the country, says govt

Human Resources Deputy Minister Ismail Muttalib says increase will negatively impact employers, especially SMEs and in turn could lead to a rise in unemployment.

DEWAN RAKYAT

KUALA LUMPUR: Human Resources Deputy Minister Ismail Muttalib has accused the opposition of being fickle on the issue of minimum wage.

Saying the proposal to increase the current minimum wage would be bad for the country, Ismail said even the opposition could not agree on what it should be increased to.

“The opposition have suggested that the minimum wage in the country be raised to RM1,500 and some of them even suggested RM1,700, which clearly shows their diverse views on the matter.

“The government has been consistent with its stand on the minimum wage, which is RM920 in Sabah, Sarawak and Labuan and RM1,000 in Peninsular Malaysia,” he said while answering Hasbullah Osman’s (BN-Gerik) question at the Dewan Rakyat here today.

He said if the minimum wage is set too high, there will be many negative effects on employers.

“Employers would not be able to manage their operational cost that would increase tremendously, and some might even shut down certain operations as they would not be able to manage the high costs.

“Also, this will result in loss of jobs that will in turn cause high unemployment rates.

“Finally, it will stunt the growth of SMEs and as a result the country and economy will lose high-skilled workers due to the lack of jobs,” Ismail said adding that Malaysia has one of the highest minimum wages in the region.

“Compared with the RM1,000 minimum wage in the peninsula, the minimum wage in Myanmar is at RM340, Laos RM479, Cambodia RM629, Philipines RM909, Indonesia RM382 and Vietnam is RM600,” he said.

Ismail said the minimum wage will only be increased after a proper study by the National Wage Consultative Council.

“Increasing the minimum wage involves many components like looking at the economic index and consultation must be done with the World Bank while making sure the rights of employees are always guaranteed.

“The government through the National Wage Consultative Council must make sure the minimum wage is always consistent and not flip-flop like that championed by certain quarters.” -FMT