PETALING JAYA: An academic has warned that if the minimum wage is not raised, it will be impossible for employees who earn such wages to cope with the rising cost of living.
Yeah Kim Leng, who teaches economics at Sunway University Business School, said the minimum wage task force should review the current situation and determine to what extent companies are able to absorb the cost of raising the minimum wage level.
“The question is, how many firms are actually operating at the margin and only paying their workers at the minimum wage level.
“By now, we should be able to see the statistics to catch the impact (of the minimum wage) since it was implemented a long time ago.
“If businesses are not able to cope with rising wages, it means they are not raising their productivity.”
Speaking to FMT, Yeah suggested that such companies reassess their business models and whether they can operate in the current environment.
He added that the government should push companies to upgrade their production and business systems, as businesses with high productivity can pay employees higher wages.
On Wednesday, Minister in the Prime Minister’s Department Abdul Rahman Dahlan told the Dewan Rakyat that companies would risk closure if the minimum wage rate were raised.
If the minimum wage rate was too high, he said, companies might lay off employees or even shut down as they would be unable to continue paying their workers.
He added that the government needed to exercise care in dealing with the issue as it had to be tackled in stages and in accordance with the current employment situation.
The matter was raised after Klang MP Charles Santiago asked whether there would be an increment in the minimum wage rate by the government.
PSM Secretary-General Sivarajan Arumugam
Parti Sosialis Malaysia (PSM) secretary-general A Sivarajan meanwhile said it would be difficult for people to cope with the cost of living if the minimum wage rate was not increased.
He said people were suffering as the current minimum wage of RM1,000 was not enough.
“The minimum wage needs to be increased to at least RM1,500 per person, which is justified given the current high cost of living,” he said.
He added that there must be a give and take between employers and employees.
“If you want employees to work, show productivity and focus on the job, then you must pay them well.
“If you pay employees well enough, they will show good results which increases the level of productivity in the company. (Then) it should be no problem to hike the minimum wage.” -FMT
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